HOTL is an ETF that tracks the performance of hotel and lodging stocks across developed countries. The fund seeks to achieve a high level of diversification by investing in a broad variety of hotel and lodging stocks. HOTL is also a passively managed fund. This makes it an excellent choice for investors who want to diversify their portfolios. In addition to its diversification benefits, HOTL also offers low fees. The fund’s dividend yield of 3.5% is also attractive.
HOTL is a passively managed ETF
The HOTL ETF provides investors with access to the lodging industry. It is a diversified basket of dozens of lodging companies that operate globally. It is a low-cost alternative to privately held equity funds, REITs, and mutual funds. It captures the entire hotel and lodging ecosystem, including real estate in developed countries and platform services.
Passive ETF providers do not incur research and employee salaries, so the costs are lower. They also tout the benefit of lower turnover, resulting in lower transaction costs and realized capital gains. Another benefit is greater transparency. Passive ETF providers publish fund weightings daily, making it easier for investors to monitor their performance and prevent strategy drift.
Passive ETFs do not actively make investment decisions, and are subject to the total market risk. They are heavily weighted in the best-valued stocks. Their components are automatically determined by the index, and their value rises or falls along with the overall market price. They are also subject to less flexibility than actively managed funds, which makes it hard to make tactical decisions or make defensive moves.
HOTL tracks a market-cap-weighted index of hotel and lodging stocks from developed countries
HOTL is a market-cap-weighted fund that tracks the performance of hotel and lodging stocks in developed countries. These companies are selected based on revenue, profit, capital expenditures, and overall exposure to the hotel industry. The fund’s underlying index is composed of these stocks, and it is rebalanced and reconstituted every quarter. Investors can invest in the HOTL without necessarily owning a hotel stock.
HOTL has underperformed the S&P 500 Index for the past year, but has recovered from its initial losses and is now a strong buy. While the housing market has shown signs of weakness, consumer prices are still rising and the Federal Reserve has reiterated its plans to keep monetary policy stimulus measures on a low-to-moderate setting. However, while the S&P 500 led all major indexes in December, the Russell 2000 and Global Dow failed to post monthly gains. However, they remain ahead of their 2020 year-end values.
HOTL costs 0.4% in fees, which is relatively low for a hotel and lodging index. But investors should be wary of Amadeus, which makes up the majority of its revenue. Amadeus has a high turnover rate, which suggests that it might be risky.
HOTL offers diversification
Extending rooms and services is one way to improve occupancy and raise prices. However, it does not necessarily introduce new markets. Diversification, on the other hand, aims to penetrate new markets without alienating existing clients. It can also mean extending the range of products or services. Diversification is a strategic approach for hotel businesses.