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This is the first article in the KPMG Aviation Finance Thought Leadership Series exploring more in-depth analytical aspects of the aviation finance markets.

Key summary points

Aircraft Lessor indexes (equal weighted) including and excluding the acquired and delisted public lessors – AVOL, AYR, and GLS are analyzed and compared against benchmarks in terms of returns, volatility and correlations.

  • Inclusive and Exclusive Lessor Indexes underperform the S&P 500 under both price and total return cases. 
  • Dividends account for a significant difference in the price and total return profiles for both Inclusive and Exclusive Lessors Indexes. 
  • Inclusive and Exclusive Lessor Indexes outperform the 3M Libor benchmarks and significantly underperform the hypothetical 15% return PE fund. 
  • Inclusive and Exclusive Lessor industry indexes are more correlated to the S&P 500 under both price and total return cases than would be suggested by industry participants and commentators 
  • Inclusive and Exclusive Lessor Indexes are very weakly positive correlated to 3M Libor while mildly positive correlation with the 15% return PE fund.

Further reading