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Is Invesco Dynamic Leisure and Entertainment ETF (PEJ) a Strong ETF Right Now?
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The Invesco Dynamic Leisure and Entertainment ETF (PEJ - Free Report) made its debut on 06/23/2005, and is a smart beta exchange traded fund that provides broad exposure to the Consumer Discretionary ETFs category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
The fund is sponsored by Invesco. It has amassed assets over $399.37 million, making it one of the larger ETFs in the Consumer Discretionary ETFs. Before fees and expenses, PEJ 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
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Operating expenses on an annual basis are 0.55% for PEJ, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 0.58%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, 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 48.50% of the portfolio. Telecom and Industrials round out the top three.
Taking into account individual holdings, Booking Holdings Inc (BKNG - Free Report) accounts for about 5.49% of the fund's total assets, followed by Yum China Holdings Inc (YUMC - Free Report) and Warner Music Group Corp (WMG - Free Report) .
Its top 10 holdings account for approximately 46.86% of PEJ's total assets under management.
Performance and Risk
The ETF has gained about 11.18% so far this year and is down about -2.51% in the last one year (as of 06/06/2023). In the past 52-week period, it has traded between $34.60 and $42.43.
The ETF has a beta of 1.30 and standard deviation of 26.36% for the trailing three-year period, making it a high risk choice in the space. With about 32 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 $171.09 million in assets, VanEck Video Gaming and eSports ETF has $293.87 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?
The Invesco Dynamic Leisure and Entertainment ETF (PEJ - Free Report) made its debut on 06/23/2005, and is a smart beta exchange traded fund that provides broad exposure to the Consumer Discretionary ETFs category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
The fund is sponsored by Invesco. It has amassed assets over $399.37 million, making it one of the larger ETFs in the Consumer Discretionary ETFs. Before fees and expenses, PEJ 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
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Operating expenses on an annual basis are 0.55% for PEJ, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 0.58%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, 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 48.50% of the portfolio. Telecom and Industrials round out the top three.
Taking into account individual holdings, Booking Holdings Inc (BKNG - Free Report) accounts for about 5.49% of the fund's total assets, followed by Yum China Holdings Inc (YUMC - Free Report) and Warner Music Group Corp (WMG - Free Report) .
Its top 10 holdings account for approximately 46.86% of PEJ's total assets under management.
Performance and Risk
The ETF has gained about 11.18% so far this year and is down about -2.51% in the last one year (as of 06/06/2023). In the past 52-week period, it has traded between $34.60 and $42.43.
The ETF has a beta of 1.30 and standard deviation of 26.36% for the trailing three-year period, making it a high risk choice in the space. With about 32 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 $171.09 million in assets, VanEck Video Gaming and eSports ETF has $293.87 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.