ETFs to Profit From Independence Day Spending and Travel
The Fourth of July, a significant holiday in the United States, is traditionally associated with barbecues, fireworks and patriotic celebrations. Recent reports indicate that Americans are willing to spend less this year amid sticky inflation but travel more than ever.
Consumer Spending
Total consumer spending for the Fourth of July holiday is expected to reach $9.4 billion, slightly down from $9.5 billion in 2023, according to the National Retail Federation. About 87% of Americans plan to spend $90.42 per person this Independence Day, down from $93.34 in 2023. Cookouts, barbecues and picnics continue to be the most popular activity (66%), followed by fireworks and community celebrations (44%).
According to Numerator, about 94% of consumers plan to purchase for the Fourth of July, with food items being the most popular (83% plan to purchase), followed by alcoholic beverages (48%), non-alcoholic beverages (38%), decorations (23%) and party supplies (21%). The majority of shoppers plan to buy from grocery or big-box stores. Beer is the preferred alcoholic beverage this Independence Day among those who plan to purchase alcohol.
As such, Independence Day marks the beginning of the busiest half of the year for retailers. Many retailers are already flashing exciting deals for the Fourth of July, and massive discounts are in the cards for this day (read: ETFs in Focus Post Disappointing Retail Sales Data).
Travel Trends
Travel is in full swing, with the Jul 4 week expected to be the busiest ever. AAA projects about 70.9 million people to travel 50 miles or more from home on the weekend (Jul 1 to Jul 8), up 5% from last year. Of them, a record 60.6 million people are expected to hit the road in the Independence Day week, 5.74 million will fly, and more than 4.6 million are expected to travel by other modes of transportation, including buses, cruises and trains (read: ETFs to Tap Surging Summer Travel Demand).
Low gas prices are encouraging more drivers to hit the road. Prices at the pump are expected to hit their lowest levels since 2021 at $3.49 per gallon, according to a news release from GasBuddy.
Airports around the United States have been packed as the Fourth of July travel season approaches. The Transportation Security Administration forecasts a record-setting holiday screening period for flyers.
The day will be a celebration of not only freedom but also economic growth. Along with the spirit of Americans, this Independence Day should lift revenues and profits in various corners. Industries like travel & leisure, lodging, hotels, restaurants and retail will benefit the most. Investors looking to capitalize on the growth could tap these industries through the following ETFs.
ETFs to Profit
AdvisorShares Restaurant ETF (EATZ)
Restaurants will benefit as more consumers eat out. AdvisorShares Restaurant ETF is actively managed and the only fund investing exclusively in the restaurant and foodservice industry, including restaurants, bars, pubs, fast food, take-out facilities, food catering services and more. AdvisorShares Restaurant ETF holds 25 securities in its basket with a modest concentration on the top firms.
AdvisorShares Restaurant ETF has gathered $3.1 million in its asset base. EATZ charges 1.01% as annual fees and trades in an average daily volume of 1,000 shares.
VanEck Vectors Retail ETF (RTH)
VanEck Vectors Retail ETF provides exposure to the 26 largest retail firms by tracking the MVIS US Listed Retail 25 Index, which measures the performance of the companies involved in retail distribution, wholesalers, online, direct mail and TV retailers, multi-line retailers, specialty retailers and food and other staples retailers.
VanEck Vectors Retail ETF has amassed $209.9 million in its asset base and charges 35 bps in annual fees. It trades in a lower volume of 5,000 shares a day on average. VanEck Vectors Retail ETF has a Zacks ETF Rank #2 with a Medium risk outlook.
U.S. Global Jets ETF (JETS)
U.S. Global Jets ETF provides exposure to the global airline industry, including airline operators and manufacturers from all over the world, by tracking the U.S. Global Jets Index. The product holds 65 securities and charges 60 bps on an annual basis (read: Airlines' Profits Set to Take Flight as Travel Rebounds: ETFs in Focus).
U.S. Global Jets ETF has gathered $1.1 billion in its asset base while seeing a heavy trading volume of nearly 2 million shares a day. JETS has a Zacks ETF Rank #2 with a High-risk outlook.
ALPS Global Travel Beneficiaries ETF (JRNY)
ALPS Global Travel Beneficiaries ETF provides diversified exposure to the global travel industry by tracking the S-Network Global Travel Index. The fund invests in 80 companies engaged in booking and rental agencies, airlines and airport services, hotels, casinos and cruise lines, along with travel-related companies identified through machine learning algorithms, such as luxury retail, entertainment, leisure, food and beverage and payment processing vendors.
ALPS Global Travel Beneficiaries ETF has accumulated $6 million in its asset base and charges 65 bps in annual fees. JRNY trades in an average daily volume of 1,000 shares.
Defiance Hotel, Airline, and Cruise ETF (CRUZ)
Defiance Hotel, Airline, and Cruise ETF tracks the BlueStar Global Hotels, Airlines, and Cruises Index, which measures the performance of globally listed companies primarily engaged in the passenger airline, hotel and cruise industries. Holding 63 stocks in its basket, American firms make up 47.6% of the portfolio, while Liberia, the United Kingdom and Panama round off the next three with single-digit exposure each.
Defiance Hotel, Airline, and Cruise ETF has gathered around $29 million in its asset base and charges 45 bps in annual fees. Volume is lower as it exchanges around 10,000 shares a day on average.
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VanEck Retail ETF (RTH): ETF Research Reports
U.S. Global Jets ETF (JETS): ETF Research Reports
AdvisorShares Restaurant ETF (EATZ): ETF Research Reports
Defiance Hotel, Airline, and Cruise ETF (CRUZ): ETF Research Reports
ALPS Global Travel Beneficiaries ETF (JRNY): ETF Research Reports
