Morgan Stanley sees easing in travel plans, and these 5 ETFs could take notice

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Exchange-traded funds linked to the travel and leisure sectors could experience turbulent waters in the coming months if Morgan Stanley is correct that travel demand could ease over the summer.

Funds that could be affected by future travel trends are the US Global Jets ETF (NYSEARCA: JETS), Invesco Dynamic Leisure and Entertainment ETF (PEJ), ETFMG Travel Tech ETF (AWAY), AdvisorShares Hotel ETF (BEDZ) and AdvisorShares Restaurant ETF (EATZ).

Morgan Staley said in a note on Tuesday: “We … are seeing signs that travel plans are being relaxed with summer, the season for travel.”

Based on the survey results, the firm added: “Travel intentions are down to January levels with 53% of consumers planning to travel within the next six months (compared to 58% two weeks ago and ~64% last summer). ). This decline was mainly driven by cohorts with incomes between $75K and $149K. Households with incomes over $150,000 are more resilient in their intentions to travel.”

While all five funds could face negative moves if travel slows down, JETS could suffer the most as it offers market-exclusive airline ETFs. JETS provides investors with access to the global air travel industry, including air carriers and manufacturers from around the world.

JETS is dominated by the four largest holdings, which together provide approximately 40% of the fund’s assets. These top four spots are occupied by Southwest Airlines (New York Stock Exchange: LOVE), United Airlines (UAL), American Airlines Group (NASDAQ: AAL) and Delta Air Lines (New York Stock Exchange: DAL), weighted at 9.66%, 9.52%, 9.38% and 9.23%, respectively.

YTD price action: JETS -23%PJ -25.9%AWAY -26.3%BEDS -23.9%and EATA -27.1%.

In travel news, Spirit Airlines (SAVE) stock rose after JetBlue (JBLU) increased its offering to $33.50 per share.

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