If you're interested in broad exposure to the Consumer Discretionary - Leisure and Entertainment segment of the equity market, look no further than the Invesco Dynamic Leisure and Entertainment ETF (
PEJ Quick Quote PEJ - Free Report) , a passively managed exchange traded fund launched on 06/23/2005.
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.
Investor-friendly, sector ETFs provide many options to gain low risk and diversified exposure to a broad group of companies in particular sectors. Consumer Discretionary - Leisure and Entertainment is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 9, placing it in bottom 44%.
The fund is sponsored by Invesco. It has amassed assets over $439.76 million, making it one of the larger ETFs attempting to match the performance of the Consumer Discretionary - Leisure and Entertainment segment of the equity market. PEJ seeks to match the performance of the Dynamic Leisure & Entertainment Intellidex Index before fees and expenses.
The Dynamic Leisure & Entertainment Intellidex Index is comprised of stocks of U.S. leisure and entertainment companies. The Index is designed to provide capital appreciation by thoroughly evaluating companies based on a variety of investment merit criteria, including fundamental growth, stock valuation, investment timeliness and risk factors.
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.55%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.41%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Consumer Discretionary sector--about 60.60% of the portfolio. Telecom and Industrials round out the top three.
Looking at individual holdings, Yum China Holdings Inc (
YUMC Quick Quote YUMC - Free Report) accounts for about 5.51% of total assets, followed by Live Nation Entertainment Inc ( LYV Quick Quote LYV - Free Report) and Mcdonald's Corp ( MCD Quick Quote MCD - Free Report) .
The top 10 holdings account for about 46.52% of total assets under management.
Performance and Risk
The ETF has added about 5.03% so far this year and is down about -15.31% in the last one year (as of 03/16/2023). In that past 52-week period, it has traded between $34.60 and $49.82.
The ETF has a beta of 1.30 and standard deviation of 33.73% for the trailing three-year period, making it a high risk choice in the space. With about 31 holdings, it has more concentrated exposure than peers.
Invesco Dynamic Leisure and Entertainment ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, PEJ is an excellent option for investors seeking exposure to the Consumer Discretionary ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
Global X Video Games & Esports ETF (
HERO Quick Quote HERO - Free Report) tracks SOLACTIVE VIDEO GAMES & ESPORTS INDEX and the VanEck Video Gaming and eSports ETF ( ESPO Quick Quote ESPO - Free Report) tracks MVIS GLOBAL VIDEO GAMING AND ESPORTS IND. Global X Video Games & Esports ETF has $154.58 million in assets, VanEck Video Gaming and eSports ETF has $265.96 million. HERO has an expense ratio of 0.50% and ESPO charges 0.56%. Bottom Line
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Zacks ETF Center.