Ballooning Assets: This ETF Has Grown over 3,000% in Past Year

With the deployment of a vaccine and some businesses easing off on restrictions, investors can play the re-opening with the Invesco Dynamic Leisure and Entertainment ETF (PEJ).

An injection of stimulus dollars is helping to fund more discretionary income for leisure and entertainment activities. The fund is up 10% for the year and 72% the past 12 months.

PEJ is based on the Dynamic Leisure & Entertainment Intellidex℠ Index (Index). The Fund will normally invest at least 90% of its total assets in common stocks that comprise the Index.

The Index 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. The Index is comprised of common stocks of 30 US.. leisure and entertainment companies.

“This ETF offers exposure to U.S. media companies, making it an option for gaining targeted exposure to a specific sub-sector of the consumer discretionary industry,” an ETF Database analysis noted.

PEJ Chart

Exponential Growth for ‘PEJ’

As of last Thursday (May 13), PEJ’s assets have ballooned to about $1.5 billion and climbing. It’s a jump of over 3000% within a year’s time and a far cry from its initial assets back in 2005.

“It sat at very low capital for a long period of time,” said John Hoffman, Invesco’s head of ETFs and indexed strategies for the Americas, during CNBC’s “ETF Edge.” “It was a way the clients looked at to position for this reopening trade, if you will.”

Holdings like Disney and Airbnb saw weakness amid social distancing measures at the height of the pandemic. That narrative should hopefully be changing as the economy slowly re-opens its doors.

“These names were beaten up pretty good during the pandemic,” Hoffman said. “But … you’ve got a basket here of 32 companies focused in the leisure and entertainment [space], names that have been benefiting from the reopening trade, and we continue to see clients add capital to the portfolio — again, a precise way to get exposure to these names that have been beaten up so hard.”

The leisure and entertainment industry should only get stronger as social distancing measures start to ease across the country. The MSCI ACWI Consumer Discretionary index is showing this strength with a gain of 55% the past year.

“I think there is a bit of a natural excitement about bringing people back together and then going out and actually being able to do these things, and so, maybe that parlays into the next level of growth,” said Douglas Yones, head of exchange-traded products at the New York Stock Exchange.


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