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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?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
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.
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
Managed by Invesco, PEJ has amassed assets over $281.78 million, making it one of the larger ETFs in the Consumer Discretionary ETFs. 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
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
Operating expenses on an annual basis are 0.57% for this ETF, which makes it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 0.39%.
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.
This ETF has heaviest allocation in the Consumer Discretionary sector - about 62.50% of the portfolio. Telecom and Industrials round out the top three.
Looking at individual holdings, Liberty Media Corp-Liberty Formula One (FWONK - Free Report) accounts for about 5.49% of total assets, followed by Expedia Group Inc (EXPE - Free Report) and Doordash Inc (DASH - Free Report) .
PEJ's top 10 holdings account for about 45.97% of its total assets under management.
Performance and Risk
The ETF has added roughly 3.85% and was up about 29.27% so far this year and in the past one year (as of 01/28/2025), respectively. PEJ has traded between $41.79 and $55.28 during this last 52-week period.
The ETF has a beta of 1.36 and standard deviation of 22.05% 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 Leisure and Entertainment ETF is a reasonable option for investors seeking to outperform the Consumer Discretionary ETFs segment of the market. However, there are other ETFs in the space which investors could 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 $99.45 million in assets, VanEck Video Gaming and eSports ETF has $282 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?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
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.
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
Managed by Invesco, PEJ has amassed assets over $281.78 million, making it one of the larger ETFs in the Consumer Discretionary ETFs. 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
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
Operating expenses on an annual basis are 0.57% for this ETF, which makes it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 0.39%.
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.
This ETF has heaviest allocation in the Consumer Discretionary sector - about 62.50% of the portfolio. Telecom and Industrials round out the top three.
Looking at individual holdings, Liberty Media Corp-Liberty Formula One (FWONK - Free Report) accounts for about 5.49% of total assets, followed by Expedia Group Inc (EXPE - Free Report) and Doordash Inc (DASH - Free Report) .
PEJ's top 10 holdings account for about 45.97% of its total assets under management.
Performance and Risk
The ETF has added roughly 3.85% and was up about 29.27% so far this year and in the past one year (as of 01/28/2025), respectively. PEJ has traded between $41.79 and $55.28 during this last 52-week period.
The ETF has a beta of 1.36 and standard deviation of 22.05% 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 Leisure and Entertainment ETF is a reasonable option for investors seeking to outperform the Consumer Discretionary ETFs segment of the market. However, there are other ETFs in the space which investors could 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 $99.45 million in assets, VanEck Video Gaming and eSports ETF has $282 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.