Designed to provide broad exposure to the Consumer Discretionary - Leisure and Entertainment segment of the equity market, the Invesco Dynamic Leisure and Entertainment ETF (PEJ) is a passively managed exchange traded fund launched on 06/23/2005.
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
Additionally, sector ETFs offer convenient ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Consumer Discretionary - Leisure and Entertainment is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 11, placing it in bottom 31%.
Index Details
The fund is sponsored by Invesco. It has amassed assets over $266.99 million, making it one of the average sized ETFs attempting to match the performance of the Consumer Discretionary - Leisure and Entertainment segment of the equity market. PEJ seeks to match the performance of the Dynamic Leisure & Entertainment Intellidex Index before fees and expenses.
The 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.
Costs
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 counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.63%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.50%.
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 Telecom sector--about 45.50% of the portfolio. Consumer Discretionary and Consumer Staples round out the top three.
Looking at individual holdings, Chipotle Mexican Grill Inc (NYSE:CMG) accounts for about 5.35% of total assets, followed by Warner Music Group Corp (WMG) and Hilton Worldwide Holdings Inc (NYSE:HLT).
The top 10 holdings account for about 47.68% of total assets under management.
Performance and Risk
Year-to-date, the Invesco Dynamic Leisure and Entertainment ETF has lost about -30.19% so far, and is down about -25% over the last 12 months (as of 11/05/2020). PEJ has traded between $19.69 and $45.60 in this past 52-week period.
The ETF has a beta of 1.36 and standard deviation of 30.33% 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 sports a Zacks ETF Rank of 5 (Strong Sell), which is based on expected asset class return, expense ratio, and momentum, among other factors. PEJ, then, is not the best option for investors seeking exposure to the Consumer Discretionary ETFs segment of the market. Instead, there are better ETFs in the space to consider.
Global X Video Games Esports ETF (HERO) tracks SOLACTIVE VIDEO GAMES & ESPORTS INDEX and the VanEck Vectors Video Gaming and eSports ETF (ESPO) tracks MVIS GLOBAL VIDEO GAMING AND ESPORTS IND. Global X Video Games Esports ETF has $386.97 million in assets, VanEck Vectors Video Gaming and eSports ETF has $592.14 million. HERO has an expense ratio of 0.50% and ESPO charges 0.55%.
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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Invesco Dynamic Leisure and Entertainment ETF (PEJ): ETF Research Reports
Chipotle Mexican Grill, Inc. (CMG): Free Stock Analysis Report
Global X Video Games Esports ETF (HERO): ETF Research Reports
Hilton Worldwide Holdings Inc. (HLT): Free Stock Analysis Report
VanEck Vectors Video Gaming and eSports ETF (ESPO): ETF Research Reports
Warner Music Group Corp. (WMG): Free Stock Analysis Report
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