The PowerShares Dynamic Leisure and Entertainment Portfolio (NYSEArca: PEJ) is a different avenue to the consumer discretionary sector than traditional, cap-weighted exchange traded funds.
The $168.1 million PEJ, which is nearly 11 years old, follows the Dynamic Leisure & Entertainment Intellidex Index, which “is designed to provide capital appreciation by thoroughly evaluating companies based on a variety of investment merit criteria, including: price momentum, earnings momentum, quality, management action, and value,” according to PowerShares.
In other words, PEJ represents a significant departure from an ETF like the Consumer Discretionary Select Sector SPDR (NYSEArca: XLY), the largest consumer discretionary ETF.
XLY, the largest consumer discretionary ETF by assets, includes exposure to retail firms, restaurants, media companies, apparel and luxury goods companies, automobile manufacturers and leisure industries.
Retailers make up a large portion of the underlying holdings. E-commerce and greater mobile commerce usage has also been a big game changer in the industry, especially with more consumers using online sources like Amazon, which XLY holds.
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As a focused play on leisure and travel stocks, PEJ excludes names such as Amazon (NasdaqGS: AMZN) and Home Depot (NYSE: HD) to focus on airlines and restaurants, among consumer discretionary industry groups.