The arrival of each new month brings with sector-level opportunities that have historically proven rewarding. Many investors often think of retail stocks and exchange traded funds as being solid ideas at this time of year, but another corner of the consumer discretionary sector could deliver during the holiday season.
The Invesco Dynamic Leisure and Entertainment Portfolio (NYSEArca: PEJ) is an ETF that often performs well in the month of December.
PEJ 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.
“Historical data indicates that one exchange-traded fund (ETF) in particular tends to shine in the final month of the year: the Invesco Dynamic Leisure and Entertainment ETF (PEJ),” according to Schaeffer’s Investment Research.
Over the past 10 years, PEJ generated positive December returns in nine of those returns with an average gain of 3.49% over that decade, according to Schaeffer’s data. PEJ’s average gain over that span is more than 30 basis points ahead of the second-best ETF on that list.
PEJ holds 30 stocks, but is not purely dedicated to consumer discretionary names. Several of the ETF’s top 10 holdings are airlines.