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

Making its debut on 06/23/2005, smart beta exchange traded fund Invesco Leisure and Entertainment ETF (PEJ) provides investors broad exposure to the Consumer Discretionary ETFs category of the market.What Are Smart Beta ETFs?The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.Fund Sponsor & IndexBecause the fund has amassed over $259.46 million, this makes it one of the larger ETFs in the Consumer Discretionary ETFs. PEJ is managed by Invesco. This particular fund, before fees and expenses, 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 ExpensesWhen considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.Annual operating expenses for PEJ are 0.57%, which makes it on par with most peer products in the space.It's 12-month trailing dividend yield comes in at 0.37%.Sector Exposure and Top HoldingsWhile ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.This ETF has heaviest allocation in the Consumer Discretionary sector - about 52.5% of the portfolio. Telecom and Industrials round out the top three.When you look at individual holdings, Expedia Group Inc (EXPE) accounts for about 5.97% of the fund's total assets, followed by Airbnb Inc (ABNB) and Marriott International Inc/md (MAR).PEJ's top 10 holdings account for about 45.54% of its total assets under management.Performance and RiskYear-to-date, the Invesco Leisure and Entertainment ETF return is roughly 6.95% so far, and was up about 21.72% over the last 12 months (as of 06/19/2026). PEJ has traded between $54.28 $65.67 in this past 52-week period. The ETF has a beta of 1.08 and standard deviation of 20.59% 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 .AlternativesInvesco Leisure and Entertainment ETF is not a suitable option for investors seeking to outperform the Consumer Discretionary ETFs segment of the market. Instead, there are other ETFs in the space which investors should 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 $62.07 million in assets, VanEck Video Gaming and eSports ETF has $237.98 million. HERO has an expense ratio of 0.50% and ESPO changes 0.55%.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 ETFsBottom 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.Boost Your Portfolio with Our Top ETF InsightsZacks' exclusive Fund Newsletter delivers actionable information, top news and analysis, as well as top-performing ETFs, straight to your inbox every week.Don’t miss out on this valuable resource. It’s free!Get it now >>This article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks