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Is Invesco Dynamic Leisure and Entertainment ETF (PEJ) a Strong ETF Right Now?
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Making its debut on 06/23/2005, smart beta exchange traded fund Invesco Dynamic Leisure and Entertainment ETF (PEJ - Free Report) provides investors broad exposure to the Consumer Discretionary ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
Because the fund has amassed over $455.86 million, this makes it one of the larger ETFs in the Consumer Discretionary ETFs. PEJ is managed by Invesco. PEJ, before fees and expenses, seeks to match the performance of the Dynamic Leisure & Entertainment Intellidex Index.
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 & Other Expenses
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins 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's 12-month trailing dividend yield comes in at 0.58%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
For PEJ, it has heaviest allocation in the Consumer Discretionary sector --about 60.70% of the portfolio --while Telecom and Industrials round out the top three.
Looking at individual holdings, Yum China Holdings Inc (YUMC - Free Report) accounts for about 5.51% of total assets, followed by Live Nation Entertainment Inc (LYV - Free Report) and Mcdonald's Corp (MCD - Free Report) .
The top 10 holdings account for about 46.52% of total assets under management.
Performance and Risk
So far this year, PEJ return is roughly 10.99%, and is down about -17.15% in the last one year (as of 04/05/2023). During this past 52-week period, the fund has traded between $34.60 and $47.68.
The ETF has a beta of 1.30 and standard deviation of 29.18% 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.
Alternatives
Invesco Dynamic Leisure and Entertainment ETF is an excellent option for investors seeking to outperform the Consumer Discretionary ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
Global X Video Games & Esports ETF (HERO - Free Report) tracks SOLACTIVE VIDEO GAMES & ESPORTS INDEX and the VanEck Video Gaming and eSports ETF (ESPO - Free Report) tracks MVIS GLOBAL VIDEO GAMING AND ESPORTS IND. Global X Video Games & Esports ETF has $169.78 million in assets, VanEck Video Gaming and eSports ETF has $292.27 million. HERO has an expense ratio of 0.50% and ESPO charges 0.56%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Consumer Discretionary ETFs.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Is Invesco Dynamic Leisure and Entertainment ETF (PEJ) a Strong ETF Right Now?
Making its debut on 06/23/2005, smart beta exchange traded fund Invesco Dynamic Leisure and Entertainment ETF (PEJ - Free Report) provides investors broad exposure to the Consumer Discretionary ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
Because the fund has amassed over $455.86 million, this makes it one of the larger ETFs in the Consumer Discretionary ETFs. PEJ is managed by Invesco. PEJ, before fees and expenses, seeks to match the performance of the Dynamic Leisure & Entertainment Intellidex Index.
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 & Other Expenses
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins 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's 12-month trailing dividend yield comes in at 0.58%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
For PEJ, it has heaviest allocation in the Consumer Discretionary sector --about 60.70% of the portfolio --while Telecom and Industrials round out the top three.
Looking at individual holdings, Yum China Holdings Inc (YUMC - Free Report) accounts for about 5.51% of total assets, followed by Live Nation Entertainment Inc (LYV - Free Report) and Mcdonald's Corp (MCD - Free Report) .
The top 10 holdings account for about 46.52% of total assets under management.
Performance and Risk
So far this year, PEJ return is roughly 10.99%, and is down about -17.15% in the last one year (as of 04/05/2023). During this past 52-week period, the fund has traded between $34.60 and $47.68.
The ETF has a beta of 1.30 and standard deviation of 29.18% 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.
Alternatives
Invesco Dynamic Leisure and Entertainment ETF is an excellent option for investors seeking to outperform the Consumer Discretionary ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
Global X Video Games & Esports ETF (HERO - Free Report) tracks SOLACTIVE VIDEO GAMES & ESPORTS INDEX and the VanEck Video Gaming and eSports ETF (ESPO - Free Report) tracks MVIS GLOBAL VIDEO GAMING AND ESPORTS IND. Global X Video Games & Esports ETF has $169.78 million in assets, VanEck Video Gaming and eSports ETF has $292.27 million. HERO has an expense ratio of 0.50% and ESPO charges 0.56%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Consumer Discretionary ETFs.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.