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Is Invesco Leisure and Entertainment ETF (PEJ) a Strong ETF Right Now?
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The Invesco 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.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
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.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
The fund is managed by Invesco. PEJ has been able to amass assets over $312.69 million, making it one of the larger ETFs in the Consumer Discretionary ETFs. This particular fund 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 & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.58%.
It has a 12-month trailing dividend yield of 0.57%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
PEJ's heaviest allocation is in the Consumer Discretionary sector, which is about 52.20% of the portfolio. Its Telecom and Industrials round out the top three.
Looking at individual holdings, Airbnb Inc (ABNB - Free Report) accounts for about 5.35% of total assets, followed by Chipotle Mexican Grill Inc (CMG - Free Report) and Booking Holdings Inc (BKNG - Free Report) .
Its top 10 holdings account for approximately 45.58% of PEJ's total assets under management.
Performance and Risk
Year-to-date, the Invesco Leisure and Entertainment ETF has added roughly 7.48% so far, and is up about 2.81% over the last 12 months (as of 11/17/2023). PEJ has traded between $34.95 and $43.23 in this past 52-week period.
The fund has a beta of 1.32 and standard deviation of 24.96% for the trailing three-year period, which makes PEJ a high risk choice in this particular space. With about 31 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco Leisure and Entertainment ETF is not a suitable option for investors seeking to outperform the Consumer Discretionary ETFs segment of the market. Instead, there are other ETFs in the space which investors should consider.
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 $136.90 million in assets, VanEck Video Gaming and eSports ETF has $247.30 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 Leisure and Entertainment ETF (PEJ) a Strong ETF Right Now?
The Invesco 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.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
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.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
The fund is managed by Invesco. PEJ has been able to amass assets over $312.69 million, making it one of the larger ETFs in the Consumer Discretionary ETFs. This particular fund 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 & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.58%.
It has a 12-month trailing dividend yield of 0.57%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
PEJ's heaviest allocation is in the Consumer Discretionary sector, which is about 52.20% of the portfolio. Its Telecom and Industrials round out the top three.
Looking at individual holdings, Airbnb Inc (ABNB - Free Report) accounts for about 5.35% of total assets, followed by Chipotle Mexican Grill Inc (CMG - Free Report) and Booking Holdings Inc (BKNG - Free Report) .
Its top 10 holdings account for approximately 45.58% of PEJ's total assets under management.
Performance and Risk
Year-to-date, the Invesco Leisure and Entertainment ETF has added roughly 7.48% so far, and is up about 2.81% over the last 12 months (as of 11/17/2023). PEJ has traded between $34.95 and $43.23 in this past 52-week period.
The fund has a beta of 1.32 and standard deviation of 24.96% for the trailing three-year period, which makes PEJ a high risk choice in this particular space. With about 31 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco Leisure and Entertainment ETF is not a suitable option for investors seeking to outperform the Consumer Discretionary ETFs segment of the market. Instead, there are other ETFs in the space which investors should consider.
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 $136.90 million in assets, VanEck Video Gaming and eSports ETF has $247.30 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.