The Invesco Dynamic Leisure and Entertainment ETF (PEJ) was launched on 06/23/2005, and is a passively managed exchange traded fund designed to offer broad exposure to the Consumer Discretionary - Leisure and Entertainment segment of the equity market.
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also 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 12, placing it in bottom 25%.
The fund is sponsored by Invesco. It has amassed assets over $252.31 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.
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for this ETF are 0.63%, making it one of the more expensive products in the space.
It has a 12-month trailing dividend yield of 0.62%.
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 Telecom sector--about 47.20% of the portfolio. Consumer Discretionary and Consumer Staples round out the top three.
Looking at individual holdings, Yum China Holdings Inc (YUMC) accounts for about 5.48% of total assets, followed by Viacomcbs Inc (VIAC) and Domino's Pizza Inc (DPZ).
The top 10 holdings account for about 46.56% of total assets under management.
Performance and Risk
So far this year, PEJ has lost about -31.61%, and is down about -27.92% in the last one year (as of 08/06/2020). During this past 52-week period, the fund has traded between $19.69 and $45.60.
The ETF has a beta of 1.29 and standard deviation of 29.85% 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.
Invesco Dynamic Leisure and Entertainment ETF sports a Zacks ETF Rank of 4 (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 $189.52 million in assets, VanEck Vectors Video Gaming and eSports ETF has $393.20 million. HERO has an expense ratio of 0.50% and ESPO charges 0.55%.
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
Dominos Pizza Inc (DPZ): Free Stock Analysis Report
Global X Video Games Esports ETF (HERO): ETF Research Reports
Yum China Holdings Inc. (YUMC): Free Stock Analysis Report
VanEck Vectors Video Gaming and eSports ETF (ESPO): ETF Research Reports
ViacomCBS Inc. (VIAC): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.