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Uber, Lyft Lead A New Next Gen Travel ETF

February 14, 2020 12:10 pm
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Uber, Lyft Lead A New Next Gen Travel ETF

The next generation of travel is here and now there's an exchange traded fund to help investors tap that theme following the debut of the ETFMG Travel Tech ETF (NYSE:AWAY), which debuted on Thursday.

What To Know

Aptly-tickered, AWAY tracks the Prime Travel Technology Index (PTRAVEL). Companies in the universe are engaged in the travel technology business.

“Travel Technology Business is defined as providing technology, via the internet and internet-connected devices such as mobile phones, to facilitate the following categories: travel bookings and reservations, ride sharing and hailing, travel price comparison, and travel advice,” according to ETFMG.

AWAY's 26 holdings “operate both direct to consumers and as providers to businesses. Companies with products and services that are predominantly tied to any of the categories of Travel Technology Business are collectively called 'Travel Technology Companies,'” said the issuer.

Why It's Important

AWAY addresses at least one issue some ETF nerds have been pondering: when and where Uber (NYSE:UBER) and Lyft (NASDAQ:LYFT) would occupy an ETF for size. Those stocks combine for 20.10% of the new ETF's weight.

The 11% weight to Uber found in AWAY makes the new fund the second-largest ETF holder of the ride-hailing firm on a percentage basis.

With a 9.1% allocation to Lyft, AWAY is by far the largest ETF owner of that stock on a percentage basis. Travel means big business for the global economy, accounting for more than 10% of global GDP on an annual basis.

Other well-known names among AWAY's top 10 holdings include Booking.com (NASDAQ:BKNG), Trip.com (NASDAQ:TCOM) and the iShares MSCI South Korea ETF (NYSE:EWY).

What's Next

Clearly, AWAY stands to benefit from upside in Lyft and Uber and is positioned as an adequate ETF proxy on those stocks.

In addition to the ride-hailing exposure, AWAY devotes 45% of its weight to travel booking and reservations sites, 18.22% to travel advice platforms and 17.44% to travel price comparison sites.

The new ETF charges 0.75% per year, or $75 on a $10,000 investment.

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