Is Invesco Leisure and Entertainment ETF (PEJ) a Strong ETF Right Now?

A smart beta exchange traded fund, the Invesco Leisure and Entertainment ETF (PEJ) debuted on 06/23/2005, and offers broad exposure to the Consumer Discretionary ETFs category of the market.What Are Smart Beta ETFs?For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.Fund Sponsor & IndexThe fund is managed by Invesco, and has been able to amass over $312.47 million, which makes it one of the larger ETFs in the Consumer Discretionary ETFs. Before fees and expenses, PEJ 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 ExpensesFor ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.Annual operating expenses for PEJ are 0.57%, which makes it on par with most peer products in the space.PEJ's 12-month trailing dividend yield is 0.13%.Sector Exposure and Top HoldingsEven though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, 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 61.70% of the portfolio --while Telecom and Industrials round out the top three.When you look at individual holdings, Doordash Inc (DASH) accounts for about 5.61% of the fund's total assets, followed by Liberty Media Corp-Liberty Formula One (FWONK) and Warner Bros Discovery Inc (WBD).PEJ's top 10 holdings account for about 48.5% of its total assets under management.Performance and RiskSo far this year, PEJ has lost about -6.66%, and was up about 5.59% in the last one year (as of 03/31/2025). During this past 52-week period, the fund has traded between $42.41 and $57.72.PEJ has a beta of 1.34 and standard deviation of 21.65% for the trailing three-year period, which makes the fund a high risk choice in the space. With about 32 holdings, it has more concentrated exposure than peers.AlternativesInvesco 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) 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 $102.90 million in assets, VanEck Video Gaming and eSports ETF has $303.01 million. HERO has an expense ratio of 0.50% and ESPO charges 0.56%.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 LineTo 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 key ETF info delivered straight to your inbox?Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.Get it free >>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 Leisure and Entertainment ETF (PEJ): ETF Research Reports Warner Bros. Discovery, Inc. (WBD): Free Stock Analysis Report Global X Video Games & Esports ETF (HERO): ETF Research Reports Liberty Media Corporation - Liberty Formula One Series C (FWONK): Free Stock Analysis Report VanEck Video Gaming and eSports ETF (ESPO): ETF Research Reports DoorDash, Inc. (DASH): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks