If you’re interested in broad exposure to the consumer discretionary leisure and entertainment segment of the stock market, look no further than the Invesco Dynamic Leisure and Entertainment ETF (PEJ), 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 opportunities to gain low-risk and diversified exposure to a broad group of companies in specific sectors. Consumer Discretionary – Leisure & Entertainment is one of 16 broad Zacks sectors in the Zacks Industry Classification. It is currently ranked 9, which puts it in the bottom 44%.
Index details
The fund is sponsored by Invesco. It has amassed over $439.76 million in assets, making it one of the larger ETFs trying to match the performance of the consumer discretionary – leisure and entertainment segment of the stock market. PEJ seeks to match the performance of the Dynamic Leisure & Entertainment Intellidex Index before fees and expenses.
The Dynamic Leisure & Entertainment Intellidex consists of stocks of US 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, equity valuation, investment timeliness and risk factors.
Expenses
Price is an important factor in choosing the right ETF, and cheaper funds can significantly outperform their more expensive counterparts, all other fundamentals being equal.
Annual operating expenses for this ETF are 0.55%, which puts it on par with most similar products in the space.
It has a trailing 12-month dividend yield of 0.41%.
Sector exposure and largest holdings
Although ETFs offer diversified exposure that minimizes the risk of individual stocks, it’s still important to look at the fund’s holdings before investing. Fortunately, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has the largest allocation to the consumer discretionary sector at around 60.60% of the portfolio. Telecommunications and industrials round out the top three.
Looking at individual holdings, Yum China Holdings Inc (YUMC) accounts for about 5.51% of total assets, followed by Live Nation Entertainment Inc (LYV) and Mcdonald’s Corp (MCD).
The top 10 holdings represent 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% over the past one year (as of 3/16/2023). During this last 52-week period, it has traded between $34.60 and $49.82.
The ETF has a beta of 1.30 and a standard deviation of 33.73% over the past three-year period, making it a high-risk pick in the space. With around 31 holdings, it has a more concentrated exposure than competitors.
Alternatives
Invesco Dynamic Leisure and Entertainment ETF holds a Zacks ETF Rank 2 (Buy), which is based on the asset class’ expected return, expense ratio and momentum, among other factors. PEJ is therefore an excellent option for investors seeking exposure to the consumer discretionary ETF segment of the market. There are other additional ETFs in the space that investors could also consider.
The Global X Video Games & Esports ETF (HERO) tracks the SOLACTIVE VIDEO GAMES & ESPORTS INDEX, and the VanEck Video Gaming and eSports ETF (ESPO) tracks the 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 row
To learn more about this product and other ETFs, browse products that fit your investment goals, and read articles about the latest developments in the ETF investment universe, please visit the Zacks ETF Center.
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Invesco Dynamic Leisure and Entertainment ETF (PEJ): ETF Research Reports
McDonald’s Corporation (MCD) : Free Stock Analysis Report
Global X Video Games & Esports ETF (HERO): ETF Research Reports
Live Nation Entertainment, Inc. (LYV) : Free Stock Analysis Report
Yum China (YUMC) : Free Stock Analysis Report
VanEck Video Gaming and eSports ETF (ESPO): ETF Research Reports
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Zacks Investment Research