Americans are getting into the festive spirit and increased spending this holiday season. More notably, consumers were inclined to spend on “experiences,” potentially lifting discretionary-sector exchange traded funds with large exposures to hotels and restaurants.
For instance, the PowerShares Dynamic Leisure and Entertainment Portfolio (NYSEArca: PEJ) targets U.S. leisure and entertainment companies, such as resorts, hotels, cruises and restaurants, and also weights components based on price momentum, earnings momentum, quality, management action, and value. PEJ is up 4.7% year-to-date.
In a holiday spending report, MasterCard (NYSE: MA) found that consumers increased spending on lodging and restaurants during this holiday season, Reuters reports. [Consumer, Retail ETFs Enjoy High Yuletide Spirits]
Sarah Quinlan, a senior vice president at MasterCard, said that casual dining and lodging were among the best areas this season, posting double-digit and nearly double-digit year-over-year sales growth, respectively, from Black Friday through December 24.
The data is pointing to an ongoing trend of “the consumer wanting experience” over goods, and the “economy is very strong but they are spending in a different way,” Quinlan said in the Reuters article.
PEJ includes large exposure to companies that provide experiences. For instance, among the ETF’s top holdings, Royal Caribbean Cruises (NYSE: RCL) is 4.4%, Restaurants Brands International (NYSE: QSR) is 5.2%, Carnival Corp (NYSE: CCL) 5.0%, Walt Disney Co (NYSE: DIS) is 5.0% and Chipotle Mexican Grill (NYSE: CMB) is 4.9%.