With the consumer discretionary sector ranking as one of this year’s best-performing sectors, investors may want to consider a more tactical approach to the group as the third quarter winds to a close.
An idea to consider is the PowerShares Dynamic Leisure and Entertainment Portfolio (NYSEArca: PEJ), which includes restaurant names.
“Restaurants are a highly discretionary category, and continued strength suggests that households are not too worried about higher gas prices and that tax cuts are providing a cushion,” Morgan Stanley economists said in a note.
PEJ, which turned 13 years old in June, targets the Dynamic Leisure & Entertainment Intellidex Index. That benchmark “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 Invesco.
In other words, PEJ is a smart beta alternative to traditional cap-weighted consumer cyclical funds.
Why Now For PEJ
On a historical basis, PEJ is one of the best-performing non-leveraged ETFs in the month of September.