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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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
The fund is managed by Invesco, and has been able to amass over $1.30 billion, which makes it one of the largest ETFs in the Consumer Discretionary ETFs. This particular fund, 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 0.55% for this ETF, which makes it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.53%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
For PEJ, it has heaviest allocation in the Consumer Discretionary sector --about 52.60% of the portfolio --while Telecom and Consumer Staples round out the top three.
When you look at individual holdings, Fox Corp (FOXA - Free Report) accounts for about 5.25% of the fund's total assets, followed by Sysco Corp (SYY - Free Report) and Live Nation Entertainment Inc (LYV - Free Report) .
The top 10 holdings account for about 44.93% of total assets under management.
Performance and Risk
The ETF has lost about -18.88% so far this year and is down about -10.21% in the last one year (as of 05/26/2022). In the past 52-week period, it has traded between $38.69 and $53.93.
The fund has a beta of 1.30 and standard deviation of 34.53% 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 Dynamic 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 $258.08 million in assets, VanEck Video Gaming and eSports ETF has $346.93 million. HERO has an expense ratio of 0.50% and ESPO charges 0.55%.
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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
The fund is managed by Invesco, and has been able to amass over $1.30 billion, which makes it one of the largest ETFs in the Consumer Discretionary ETFs. This particular fund, 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 0.55% for this ETF, which makes it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.53%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
For PEJ, it has heaviest allocation in the Consumer Discretionary sector --about 52.60% of the portfolio --while Telecom and Consumer Staples round out the top three.
When you look at individual holdings, Fox Corp (FOXA - Free Report) accounts for about 5.25% of the fund's total assets, followed by Sysco Corp (SYY - Free Report) and Live Nation Entertainment Inc (LYV - Free Report) .
The top 10 holdings account for about 44.93% of total assets under management.
Performance and Risk
The ETF has lost about -18.88% so far this year and is down about -10.21% in the last one year (as of 05/26/2022). In the past 52-week period, it has traded between $38.69 and $53.93.
The fund has a beta of 1.30 and standard deviation of 34.53% 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 Dynamic 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 $258.08 million in assets, VanEck Video Gaming and eSports ETF has $346.93 million. HERO has an expense ratio of 0.50% and ESPO charges 0.55%.
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.