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

Designed to provide broad exposure to the Consumer Discretionary ETFs category of the market, the Invesco Leisure and Entertainment ETF (PEJ) is a smart beta exchange traded fund launched on 06/23/2005.What Are Smart Beta ETFs?Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.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.However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.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 sponsored by Invesco. It has amassed assets over $253.92 million, making it one of the average sized ETFs in the Consumer Discretionary ETFs. This particular fund seeks to match the performance of the Dynamic Leisure & Entertainment Intellidex Index before fees and expenses.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.The fund has a 12-month trailing dividend yield of 0.13%.Sector Exposure and Top HoldingsMost ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.PEJ's heaviest allocation is in the Consumer Discretionary sector, which is about 49.3% of the portfolio. Its Telecom and Consumer Staples round out the top three.Looking at individual holdings, Warner Bros Discovery Inc (WBD) accounts for about 9.96% of total assets, followed by Las Vegas Sands Corp (LVS) and Doordash Inc (DASH).PEJ's top 10 holdings account for about 48.59% of its total assets under management.Performance and RiskThe ETF has gained about 15.7% and was up about 12.64% so far this year and in the past one year (as of 12/10/2025), respectively. PEJ has traded between $42.84 and $62.19 during this last 52-week period. PEJ has a beta of 1.12 and standard deviation of 20.36% for the trailing three-year period, which makes the fund a high risk choice in the space. With about 33 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 $118.25 million in assets, VanEck Video Gaming and eSports ETF has $398.87 million. HERO has an expense ratio of 0.50% and ESPO changes 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 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 >>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 ReportsThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks