Should You Invest in the Invesco Dynamic Food & Beverage ETF (PBJ)?
Launched on 06/23/2005, the Invesco Dynamic Food & Beverage ETF (PBJ) is a passively managed exchange traded fund designed to provide a broad exposure to the Consumer Staples - Food & Beverage segment of the equity market.
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
Investor-friendly, sector ETFs provide many options to gain low risk and diversified exposure to a broad group of companies in particular sectors. Consumer Staples - Food & Beverage is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 2, placing it in top 13%.
Index Details
The fund is sponsored by Invesco. It has amassed assets over $338.23 million, making it one of the average sized ETFs attempting to match the performance of the Consumer Staples - Food & Beverage segment of the equity market. PBJ seeks to match the performance of the Dynamic Food & Beverage Intellidex Index before fees and expenses.
The Dynamic Food & Beverage Intellidex Index is comprised of stocks of 30 U.S. food and beverage companies.These are companies that are principally engaged in the manufacture, sale or distribution of food and beverage products, agricultural products and products related to the development of new food technologies.
Costs
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.63%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.79%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Consumer Staples sector--about 93.60% of the portfolio.
Looking at individual holdings, General Mills Inc (GIS) accounts for about 5.49% of total assets, followed by Kraft Heinz Co/the (KHC) and Hershey Co/the (HSY).
The top 10 holdings account for about 46.87% of total assets under management.
Performance and Risk
Year-to-date, the Invesco Dynamic Food & Beverage ETF has added roughly 1.36% so far, and is up about 5.22% over the last 12 months (as of 02/20/2023). PBJ has traded between $42.01 and $49.16 in this past 52-week period.
The ETF has a beta of 0.63 and standard deviation of 20.28% for the trailing three-year period, making it a medium risk choice in the space. With about 31 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco Dynamic Food & Beverage ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, PBJ is an excellent option for investors seeking exposure to the Consumer Staples ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
VanEck Future of Food ETF (YUMY) tracks ---------------------------------------- and the First Trust NASDAQ Food & Beverage ETF (FTXG) tracks Nasdaq US Smart Food & Beverage Index. VanEck Future of Food ETF has $2.77 million in assets, First Trust NASDAQ Food & Beverage ETF has $1.01 billion. YUMY has an expense ratio of 0.69% and FTXG charges 0.60%.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Invesco Dynamic Food & Beverage ETF (PBJ): ETF Research Reports
Hershey Company (The) (HSY) : Free Stock Analysis Report
General Mills, Inc. (GIS) : Free Stock Analysis Report
The Kraft Heinz Company (KHC) : Free Stock Analysis Report
First Trust NASDAQ Food & Beverage ETF (FTXG): ETF Research Reports
VanEck Future of Food ETF (YUMY): ETF Research Reports
