Leisure & Entertainment Portfolio, Series 3
Leisure and entertainment refers to those activities or services that provide relaxation and enjoyment. There are several categories that fall under this industry some of which include: gaming, hospitality,
movies, music, restaurants and tourism. Over the past several years there has been a shift in regards to personal-consumption expenditures where consumers are increasingly focused on desirable
experiences, not desirable products.
- On an average day in 2018, approximately 96% of Americans aged 15 years and over were
engaged in some type of leisure activity. On average, adults 75 years and over spent 7.8 hours
per day engaged in leisure activities which represents more than any other age group.1
- In 2018, U.S. casinos experienced a record-setting year with nationwide consumer spending
on casino gaming reaching the highest-ever annual total of $41.68 billion, an increase
of 3.5% over 2017. Since the recession in 2009, the casino industry has grown every year
- According to the U.S. Travel Association, leisure travel accounted for 80% of all U.S. domestic
travel in 2018. In addition, the total number of American jobs supported by the travel industry
was 15.7 million.
1 U.S. Bureau of Labor Statistics
2 American Gaming Association
|Not FDIC Insured Not Bank Guaranteed May Lose Value
The Baby Boomer Influence
As baby boomers age, the leisure and entertainment choices they make may change along
with them. They may become less likely to participate in physically demanding sports. Instead, we
anticipate that activities such as golf, travel, gambling and less physically demanding activities
will grow in popularity among baby boomers. According to Pew Research Center, between 2011
(when the oldest baby boomer reached age 65) and 2029 (when the youngest baby boomer
turns age 65), roughly 3.8 million baby boomers are expected to turn 65 each year, or about
An investment in this unmanaged unit investment trust should be made
with an understanding of the risks involved with owning common stocks, such as an economic recession and
the possible deterioration of either the financial condition of the issuers of the equity securities or the general
condition of the stock market.
You should be aware that the portfolio is concentrated in stocks in both the communication services and
consumer product sectors which involves additional risks, including limited diversification. The companies
engaged in the communication services sector are subject to rapidly changing technology, rapid product
obsolescence, loss of patent protection, cyclical market patterns, governmental regulation, evolving industry
standards and frequent new product introductions. Certain companies may be particularly susceptible to
cybersecurity threats, which could have an adverse effect on their business. The companies engaged in
the consumer products industry are subject to global competition, changing government regulations and
trade policies, currency fluctuations, and the financial and political risks inherent in producing products for
General risks of the leisure and entertainment industries include the general state of the economy, increased
governmental regulation, cyclical market patterns, intense competition and consumer spending trends. A
decline in the economy which results in a reduction of consumers’ disposable income can negatively impact
consumer spending habits.
An investment in a portfolio containing equity securities of foreign issuers is subject to additional risks,
including currency fluctuations, political risks, withholding, the lack of adequate financial information, and
exchange control restrictions impacting foreign issuers.
An investment in a portfolio containing small-cap and mid-cap companies is subject to additional risks, as
the share prices of small-cap companies and certain mid-cap companies are often more volatile than those
of larger companies due to several factors, including limited trading volumes, products, financial resources,
management inexperience and less publicly available information.
As the use of Internet technology has become more prevalent in the course of business, the trust has become more susceptible to potential operational risks through breaches in cybersecurity.
The value of the securities held by the trust may be subject to steep declines or increased volatility due to changes in performance or perception of the issuers.
Although this portfolio terminates in approximately 15 months, the strategy is long-term. Investors should consider their ability to pursue investing in successive portfolios, if available. There may be tax consequences unless
units are purchased in an IRA or other qualified plan.
The global economic impact of the COVID-19 outbreak is impossible to predict but is expected to disrupt
manufacturing, supply chains and sales in affected areas and negatively impact global economic