You can now buy shares in the first travel tech ETF

Posted: 19 February 2020 9:06 am
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ETFMG is offering a new fund that features stocks from the largest travel tech companies like Uber, Lyft and Booking.com.

If you’ve been looking for a way to invest in Uber, Lyft and the latest generation of app-based travel services without having to stomach exuberant stock prices, you may be in luck. The EFTMG Travel Tech ETF has been launched, offering a basket of the most traded travel tech companies’ stocks.

Based on the Prime Travel Technology Index (PTRAVEL) — which tracks event news and long-term trends in travel tech companies — the ETF, which trades under the ticker symbol AWAY, consists of two publicly traded stocks. Per ETFMG, these companies provide “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.”

Among the companies included in the exchange-traded fund are Uber, Expedia, Lyft, Trip.com, Trainline and Booking Holdings. Booking Holdings Inc. is the holding company for travel search engines Booking.com, Priceline.com, Kayak.com, Cheapflights and OpenTable. These companies “operate both direct to consumers and as providers to businesses,” per ETFMG.

While there have been ETFs that feature travel companies such as airlines and car rental companies, this ETF represents the first commercial fund dedicated to travel tech. With more than 18% weight being offered to Uber and Lyft, this EFT is presenting itself to be a significant holder of the rideshare stocks. 45.05% of the ETF, however, is dedicated to travel bookings and reservations services, followed by 19.26% ride-sharing companies, 17.46% travel price comparison services and 18.22% travel advice companies.

The new ETF is presented on NYSE Arca, the all-digital ETF trading area for the New York Stock Exchange. Shares can be bought from any ETF brokerage.

Monetizing the new digital economy

The development of the Travel Tech ETF represents ETFMG’s approach toward monetizing the digital economy. Other ETFMG ETFs include the Prime Cyber Security ETF (HACK), which includes the stock of cybersecurity solution providers like Cisco, Palo Alto Networks and Akamai Technologies; ITEQ, which covers innovative tech companies in the Israeli market; and the Prime Mobile Payments ETF (IPAY), which covers mobile payment platforms like Mastercard, Visa, Paypal and Square.

The ETF has a 0.75% per year charge and was launched on February 12th.

With the travel industry being hit by the China coronavirus outbreak, travel tech has been largely seen as an unsure bet. But while Lyft and Uber have yet to post a profit, both companies’ stocks have seen historic gains. Lyft, for example, has seen a 25% stock price increase since the start of the year on more than $1 billion in revenue following reported fourth-quarter losses of $356 million.

Both companies failed to meet expectations with their IPOs. However, both stocks have shown significant growth since their public launch, with Uber on track to post its first profit this year. Lyft is looking to 2021 to break into the black.

Uber and Lyft make up 99% of the American rideshare industry. The remaining 1% consists of the remainder of the rideshare industry, including Google’s Waymo, Sidecar, Ridejoy, Getaround and BlaBlaCar.

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