Advertisement
Canada markets open in 5 hours 53 minutes

  • S&P/TSX

    21,953.80
    +78.01 (+0.36%)
     

  • S&P 500

    5,509.01
    +33.92 (+0.62%)
     

  • DOW

    39,331.85
    +162.33 (+0.41%)
     

  • CAD/USD

    0.7318
    +0.0007 (+0.10%)
     

  • CRUDE OIL

    83.22
    +0.41 (+0.50%)
     

  • Bitcoin CAD

    83,248.22
    -2,196.86 (-2.57%)
     

  • CMC Crypto 200

    1,312.23
    -22.68 (-1.70%)
     

  • GOLD FUTURES

    2,351.80
    +18.40 (+0.79%)
     

  • RUSSELL 2000

    2,033.87
    +3.81 (+0.19%)
     

  • 10-Yr Bond

    4.4360
    -0.0430 (-0.96%)
     

  • NASDAQ futures

    20,244.00
    -11.25 (-0.06%)
     

  • VOLATILITY

    12.12
    +0.09 (+0.75%)
     

  • FTSE

    8,161.29
    +40.09 (+0.49%)
     

  • NIKKEI 225

    40,580.76
    +506.07 (+1.26%)
     

  • CAD/EUR

    0.6798
    -0.0002 (-0.03%)
     

Should You Invest in the Invesco Dynamic Leisure and Entertainment ETF (PEJ)?

Zacks Equity Research
·3 min read

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.

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.

Investor-friendly, sector ETFs provide many options 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 9, placing it in bottom 44%.

Index Details

The fund is sponsored by Invesco. It has amassed assets over $414.56 million, making it one of the larger 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.

ADVERTISEMENT

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.

Costs

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 0.55%, 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

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 Consumer Discretionary sector--about 48.50% of the portfolio. Telecom and Industrials round out the top three.

Looking at individual holdings, Booking Holdings Inc (BKNG) accounts for about 5.49% of total assets, followed by Yum China Holdings Inc (YUMC) and Warner Music Group Corp (WMG).

The top 10 holdings account for about 46.86% of total assets under management.

Performance and Risk

So far this year, PEJ has added roughly 17.62%, and it's up approximately 16.44% in the last one year (as of 07/18/2023). During this past 52-week period, the fund has traded between $34.60 and $42.91.

The ETF has a beta of 1.30 and standard deviation of 25.50% 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 carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, PEJ is a reasonable option for those seeking exposure to the Consumer Discretionary ETFs area of the market. Investors might also want to consider some other ETF options in the space.

Global X Video Games & Esports ETF (HERO) tracks SOLACTIVE VIDEO GAMES & ESPORTS INDEX and the VanEck Video Gaming and eSports ETF (ESPO) tracks MVIS GLOBAL VIDEO GAMING AND ESPORTS IND. Global X Video Games & Esports ETF has $182.71 million in assets, VanEck Video Gaming and eSports ETF has $314.15 million. HERO has an expense ratio of 0.50% and ESPO charges 0.56%.

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.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Invesco Dynamic Leisure and Entertainment ETF (PEJ): ETF Research Reports

Global X Video Games & Esports ETF (HERO): ETF Research Reports

Yum China (YUMC) : Free Stock Analysis Report

Booking Holdings Inc. (BKNG) : Free Stock Analysis Report

VanEck Video Gaming and eSports ETF (ESPO): ETF Research Reports

Warner Music Group Corp. (WMG) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research