Walt Disney Earnings Could Jolt These ETFs


Walt Disney Co (NYSE:DIS) is expected to post its quarterly earnings at $1.42 per share on revenue of $13.23 billion when those results are delivered after Tuesday's close.

At time of writing, shares of Walt Disney were up about a half of a percent on the day after earlier touching an all-time high. The stock is up 29.5 percent year-to-date, making it one of just three of 30 Dow members to post a 2015 gain of at least 20 percent.

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With its soaring market value, now nearly $207 billion, the owner of the ABC and ESPN networks is taking on an increased role of importance in various exchange traded funds, meaning its earnings update and guidance from Disney has the potential to move several well-known ETFs.

The Standard ETF

Investors looking for an ETF proxy on Disney need not look any further than standard, market cap-weighted consumer discretionary funds, including the Consumer Discretionary Select Sector SPDR (NYSE:XLY). XLY, the largest and most heavily traded discretionary ETF, features a 7.9 percent weight to Disney, making the stock the ETF's second-largest holding behind Amazon.com, Inc.(NASDAQ:AMZN).

Related Link: Is The Market Overlooking This Huge Disney Catalyst?

Up more than 11 percent this year, XLY currently resides just pennies below its recently touched all-time high. Decent weights to Amazon and Disney have certainly helped, but so has the ETF's 3.3 percent weight to Nike Inc(NYSE:NKE), one of the other two Dow stocks that in addition to Disney have climbed at least 20 percent this year. XLY could alsoget a boost this week from Priceline(NASDAQ:PCLN)'s earnings report. Nike and Priceline are both top 10 holdings in XLY.

The Media ETF

There is one dedicated media ETF, the PowerShares Dynamic Media Portfolio (NYSE:PBS) and that fund makes for a predictable home for Disney shares. Indeed, Disney is the second-largest holding in PBS at a weight of 5.8 percent.

PBS is up 6.6 percent this year, well ahead of the 1.8 percent gained by the S&P 500. The ETF tracks the Dynamic Media Intellidex Index, which evaluates companies on criteria including price momentum, earnings momentum, quality, management action, and value, according to PowerShares.

Another PowerShares ETF, the PowerShares Dynamic Leisure and Entertainment Portfolio (NYSE:PEJ), also features solid Disney exposure with a 5.2 percent allocation to the stock. That also makes Disney that ETF's second-largest holding.

PEJ is up nearly 7 percent this year. In addition to the Disney exposure, there are other reasons to like this ETF. As noted previously, airline stocks are starting to get their groove back thanks to low oil prices and nickel-and-diming passengers to the tune of billions of dollars in pesky fees. That stinks for travelers, but it is good for PEJ. The ETF allocates over 31 percent of its weight to industrial stocks, all of which are airlines.

The Momentum ETF

Another option for ETF investors looking to access Disney is the iShares MSCI USA Momentum Factor ETF (NYSE:MTUM). At a time when growth and momentum stocks are outpacing their value counterparts, MTUM would be worth a look regardless of its weight to Disney, but for today, it matters that the ETF devotes 5.3 percent of its weight to Mickey Mouse. As is the case with PBS and PEJ, Disney is the second-largest holding in MTUM.

Another interesting fact about MTUM is that UnitedHealth Group Inc(NYSE:UNH) is one of its top 10 holdings. That is the third Dow stock, in addition to Nike and Walt Disney, that is up at least 20 percent this year.

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