The funds investing in our summer holidays

I don’t know about you, but I’m counting the days until my summer holiday. It feels like ages since we’ve been able to relax for a couple of weeks in the sun.

Of course, getting away may depend on whether UK airports are still blighted by horrendous delays, as cancelled flights have made it a nightmare for travellers in recent weeks.

These problems couldn’t have come at a worse time for the travel industry, which was starting to see a strong uptick in bookings after being badly affected by Covid-19 restrictions.

But I, for one, am optimistic. So, let’s have a look at the funds that are equally positive about the prospects for holidays this summer:

Holidays in the sun

While some have planned their holidays already, others will no doubt leave things until the last minute. And where better to find such ideas than lastminute.com, a holding in Janus Henderson European Smaller Companies*?

The online travel and leisure retailer was founded by Martha Lane Fox and Brent Hoberman in 1998 and was a part of the UK internet boom of the late 1990s. Today it is run 17 languages and 40 countries.

Another option is Jet2, the leisure travel group, which has benefitted from the relaxing of Covid-related restrictions and has seen an increase in customer confidence for travelling abroad.

The company is a holding in the Sanlam Enterprise fund*, which highlighted the stock’s potential benefits in a recent update. “Jet2 has been buoyed by the reopening of economies and pent-up demand for foreign travel,” it stated. Sanlam noted that Jet2’s on-sale seat capacity for summer 2022 was roughly 14% up on summer 2019 – before Covid-19 started affecting the markets. “The company is 95% hedged for jet fuel for summer 2022 and circa 65% hedged for winter 2022/23 which will insulate it from further volatility in energy prices,” it added.

The fund also has a holding in WH Smith*, a company known as a high street retailer, but which also has outlets at airport terminals both before security and airside.

Investing in airports

Speaking of airports: while Heathrow may be making the headlines for all the wrong reasons, First Sentier Global Listed Infrastructure has invested in Flughafen Zurich and Grupo Aeroportuario del Sureste*.

The former is Zürich Airport, the largest international airport of Switzerland and the principal hub of Swiss International Air Lines. The latter is a Mexican airport operator headquartered in Mexico City. It operates 9 airports in the South-eastern states of Mexico, including that of Cancún. 

Taking the train

First Sentier Global Listed Infrastructure also owns shares in Getlink*, the company that operates the infrastructure of the Channel Tunnel between England and France, the Eurotunnel Shuttle train service, and earns revenue on other trains that operate through the tunnel.

Closer to home, UK listed Trainline, the independent rail and coach travel platform, has been one of the top contributors to the performance of the TM Tellworth UK Smaller Companies fund of late**. The company recently revealed group net ticket sales of £2.5bn, up 222% on the previous year, and revenue of £189m, which is an increase of 181%^. It’s also stepping up investment in its international business to reflect the opportunity in Europe. “Domestic competition between rail carriers in Europe is stepping up meaningfully. Following the recent launch of new entrants Ouigo in Spain and Trenitalia in France, carrier competition now exists on 6 of the top 10 high speed routes in Europe,” it stated.

Staycations

This is less of a stock idea and more of a theme. Despite the foreign travel recovery, millions of people will still be looking to holiday closer to home this year.

This is where the TIME:Commercial Long Income fund can score highly. The portfolio looks to achieve a consistent income stream and some growth by investing in properties with long leases.

These currently include sites such as Travelodge in Kingston, the Premier Inn at Great Yarmouth, and Southend’s Holiday Inn*. Another significant holding is in the Liddington site of PGL, the Wiltshire-based adventure holiday retreat that was formerly a hotel and conference centre*.

*Source: fund provider, May 2022
**Source: fund provider, April 2022
^Source: Trainline, 5 May 2022

Past performance is not a reliable guide to future returns. You may not get back the amount originally invested. The views expressed are those of the commentators and do not constitute financial advice. Mention of specific securities is for illustration purposes only and should not be taken as a recommendation to buy or to sell.