The media industry has been performing remarkably well and is leading the broad consumer space this year thanks to the new age of entertainment, technological evolution, digital applications, online advertising and changing consumer habits.
Traditional media firms are increasingly joining the Web, lured by the growing online customer base and lower advertising prices. Further, these companies are adopting new ways of generating revenues from other sources. The most popular is the online subscription for complete access to articles on phones, tablet computers and the Internet.
This solid trend in media is further supported by improving economic fundamentals and a string of upbeat data. The healing job market, recovering housing market, robust retail sales data, and increasing consumer spending continued to fuel optimism in the space.
Entertainment spending is also growing with gradual improvement in the economy, suggesting that this corner of the consumer space is gaining momentum heading into 2014.
Moreover, many of the segments, like Cable TV and Broadcast radio/TV, in this sector receive high Zacks Industry Ranks, suggesting that they are poised to outperform their peers in the coming months (read: 3 Top Ranked Consumer ETFs for the Holiday Season).
Based on the favorable trends and growing advertising revenue streams, many bullish investors may want to make a broad play on the media sector. This can be easily done by the only pure play –PowerShares Dynamic Media Portfolio (NYSEARCA:PBS) – which tracks the Dynamic Media Intellidex Index.
The ETF has amassed $293.4 million in its asset base while trades in a solid volume of roughly 140,000 shares a day. The product charges 63 bps in fees and expenses from investors.
The fund gained over 50% in 2013, easily outpacing the other consumer funds and the broad market funds. This outperformance is likely to continue in 2014 given that PBS has a Zacks ETF Rank of 2 or ‘Buy’ with Medium risk outlook. Further, both technical and fundamental factors confirm the bullish trends as described below: