Should You Invest in the Invesco Dynamic Leisure and Entertainment ETF (PEJ)?
Looking for broad exposure to the Consumer Discretionary - Leisure and Entertainment segment of the equity market? You should consider the Invesco Dynamic Leisure and Entertainment ETF (PEJ), a passively managed exchange traded fund launched on 06/23/2005.
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
Sector ETFs also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. Consumer Discretionary - Leisure and Entertainment is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 13, placing it in bottom 19%.
Index Details
The fund is sponsored by Invesco. It has amassed assets over $263.52 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
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
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 0.57%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Telecom sector--about 47.70% 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 5.67% of total assets, followed by Viacomcbs Inc (VIAC) and Chipotle Mexican Grill Inc (CMG).
The top 10 holdings account for about 47.59% of total assets under management.
Performance and Risk
The ETF has lost about -25.41% so far this year and is down about -20.30% in the last one year (as of 08/28/2020). In that past 52-week period, it has traded between $19.69 and $45.60.
The ETF has a beta of 1.29 and standard deviation of 29.90% 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 4 (Sell), which is based on expected asset class return, expense ratio, and momentum, among other factors. PEJ, then, is not a great choice 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 $251.10 million in assets, VanEck Vectors Video Gaming and eSports ETF has $471.09 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
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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