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Tap Disney's Roaring Box Office Success With These ETFs

Sweta Killa

The Walt Disney Company DIS continued to dominate the film industry with a blockbuster opening weekend from The Lion King and a new milestone set by Avengers: Endgame.

The Lion King Saw Huge Success

Disney’s live-action remake of the 1994 animated classic — The Lion King — made a stunning debut in North America grossing an estimated $185 million in its first three days. It surpassed Beauty and the Beast ($174.7 million) to become the biggest opening of all time for a Disney remake in North America and beat Harry Potter and the Deathly Hallows: Part 2, which brought in $169.1 million in 2011, to clock the record of the highest July opening in North America.

The movie, which features photorealistic animals voiced by entertainment A-listers like Donald Glover and Beyonce also broke records for PG-rated movies and animated films, beating The Incredibles 2 ($182.7 million). It topped releases like Alice in Wonderland and The Jungle Book. Will all these record-breakings, The Lion King is now Disney's biggest opening ever in North America outside of Marvel or Lucasfilm movies (see: all the Consumer Discretionary ETFs here).

Outside the United States, The Lion King has raked in about $531 million, including $97 million from China.

Avengers: Endgame Sets History

Marvel Studios' action movie — Avengers: Endgame — surpassed the 10-year record set by James Cameron’s Avatar this past weekend to become the all-time highest-grossing film in history. The Marvel superhero movie amassed an estimated $2.79 billion at the global box office over a 13-week run compared to Avatar’s record of $2.7897 billion over 234 days during its first run.

The House of Mouse is already having a banner year with four of the top five films setting a record at the domestic box office. These include Avengers: Endgame ($854 million), Captain Marvel ($427 million), Toy Story 4 ($376 million) and Aladdin ($340 million). Market is expecting The Lion King to soon join this bandwagon. The fifth movie was Spider-Man: Far from Home, co-produced by Disney-owned Marvel Studios (read: Best & Worst ETFs Halfway Through July).

Given the huge dominance of Disney at the box office this year, investors could tap the success with consumer ETFs having the largest exposure to this global media and entertainment company. Below, we have highlighted some of them:

Multifactor Media and Communications ETF JHCS

This ETF targets a wide range of U.S. media and communication stocks to exploit the sector's opportunities by tracking the John Hancock Dimensional Media and Communications Index. It holds 65 stocks in its basket with DIS taking the top spot at 8.1% share. JHCS has managed assets worth $21.5 million and charges 40 bps in annual fees. It trades in average daily volume of 12,000 shares.

Fidelity MSCI Communication Services Index ETF FCOM

This fund follows the MSCI USA IMI Communication Services 25/50 Index. It holds 109 stocks in its basket with Disney occupying the fourth position at 7.4%. The product has amassed $348.2 million in its asset base and trades in average daily volume of 92,000 shares. It charges 8 bps in annual fees and has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook (read: 5 Leveraged ETFs That Gained Double-Digits Halfway July).

iShares U.S. Consumer Services ETF IYC

This ETF offers exposure to U.S. companies that distribute food, drugs, general retail items and media by tracking the Dow Jones U.S. Consumer Services Capped Index. It holds 168 stocks in its basket, with Disney taking the second spot at 7.2%. The fund has amassed $975.6 million in its asset base, while trades in lower volumes of 37,000 shares a day on average. It charges 43 bps in annual fees from investors and has a Zacks ETF Rank #2 with a Medium risk outlook.

iShares Evolved U.S. Media and Entertainment ETF IEME

This is an actively managed ETF that employs data science techniques to identify companies with exposure to the media and entertainment sector. Holding 92 stocks in its basket, Disney occupies the top position in the basket with 6.9% share. The fund has accumulated $7 million in its asset base and charges 18 bps in annual fees. It trades in paltry volume of around 3,000 shares (read: Netflix Posts Q2 U.S. Subscriber Loss: ETFs to Watch).

Invesco Dynamic Media ETF PBS

PBS seeks to offer capital appreciation by investing in companies that are selected on a variety of investment merit criteria, including price momentum, earnings momentum, quality, management action and value by tracking the Dynamic Media Intellidex Index. This approach results in a basket of 30 stocks with Disney occupying the fifth spot at 5.1%. The product has AUM of $70.8 million and average daily volume of 24,000 shares. It has an expense ratio of 0.63% and has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.

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