Investment Ideas – Left-field bond ideas, airlines and an income fund idea
Adding Sequoia Economic Infrastructure to my funds watch list
A trading idea - airlines ETF as a beta on volatile oil prices
Adventurous bond ideas for fixed-income investors
Infrastructure lending funds, Sequoia vs GCP
Airlines – a trading idea
Let’s kick off with a simple trade idea - a contrarian one - courtesy of Tricio’s Chief markets strategist Gerry Celaya. I rate Gerry as a technical-based investor very highly and in a recent investment update he focuses on a relatively simple cyclical trade idea – via an ETF called the JETS ETF.
This relatively new ETF – boasting a TER of 0.65% (on 50 stocks in the portfolio) - that “delivers exposure to the global airline industry including airline operators and manufacturers from all over the world. The JETS Airline ETF tracks the U.S. Global Jets Index and tracks companies within the commercial airline, aircraft manufacturing, and airport & terminal services industries. The index uses a combination of fundamental factors to determine the most efficient airline companies and provides diversification through exposure to companies around the world listed on well-developed stock exchanges.”
The tactical idea is that this ETF has a close correlation to both the oil price and consumer spending surges. So, logically, if the oil price sags back, and consumers feel confident again, this ETF should be a beneficiary. Here’s Gerry’s current overview:
“We have liked the airline idea on dips in the past, with the warning that airlines go bust all of the time, which kept Warren Buffet away from them for decades. He famously ignored his own advice in 2016 but then sold out in 2020 as the shares cratered on the back of the Covid shutdowns.
Now what? [the chart above shows] a relatively important ‘gap’ area coming up as potential support, just above the 2020 lows. These can be important sentiment areas, as the ‘gap’ resistance area shows from 2020 just as Covid made big news. The link with oil prices has been made by many, but the chart below suggests that airline investors don’t always sell when oil prices rise. If energy prices stabilise, and tensions in the Middle East ease, airline shares (and the ETF) may find demand building again.”
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