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Is Invesco Dynamic Food & Beverage ETF (PBJ) a Strong ETF Right Now?
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Launched on 06/23/2005, the Invesco Dynamic Food & Beverage ETF (PBJ - Free Report) is a smart beta exchange traded fund offering broad exposure to the Consumer Staples ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
The fund is managed by Invesco, and has been able to amass over $284.65 million, which makes it one of the average sized ETFs in the Consumer Staples ETFs. Before fees and expenses, this particular fund seeks to match the performance of the Dynamic Food & Beverage Intellidex Index.
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.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Annual operating expenses for PBJ are 0.63%, which makes it one of the more expensive products in the space.
It has a 12-month trailing dividend yield of 0.81%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
For PBJ, it has heaviest allocation in the Consumer Staples sector --about 97.30% of the portfolio.
Looking at individual holdings, Archer-Daniels-Midland Co (ADM - Free Report) accounts for about 5.20% of total assets, followed by Hershey Co/the (HSY - Free Report) and General Mills Inc (GIS - Free Report) .
Its top 10 holdings account for approximately 45.81% of PBJ's total assets under management.
Performance and Risk
The ETF has added about 5.57% and is up about 16.44% so far this year and in the past one year (as of 04/29/2022), respectively. PBJ has traded between $40.33 and $49.16 during this last 52-week period.
PBJ has a beta of 0.67 and standard deviation of 18.97% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 32 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco Dynamic Food & Beverage ETF is a reasonable option for investors seeking to outperform the Consumer Staples ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
VanEck Future of Food ETF tracks ---------------------------------------- and the First Trust NASDAQ Food & Beverage ETF (FTXG - Free Report) tracks Nasdaq US Smart Food & Beverage Index. VanEck Future of Food ETF has $2.17 million in assets, First Trust NASDAQ Food & Beverage ETF has $809.95 million. YUMY has an expense ratio of 0.69% and FTXG charges 0.60%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Consumer Staples ETFs.
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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Is Invesco Dynamic Food & Beverage ETF (PBJ) a Strong ETF Right Now?
Launched on 06/23/2005, the Invesco Dynamic Food & Beverage ETF (PBJ - Free Report) is a smart beta exchange traded fund offering broad exposure to the Consumer Staples ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
The fund is managed by Invesco, and has been able to amass over $284.65 million, which makes it one of the average sized ETFs in the Consumer Staples ETFs. Before fees and expenses, this particular fund seeks to match the performance of the Dynamic Food & Beverage Intellidex Index.
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.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Annual operating expenses for PBJ are 0.63%, which makes it one of the more expensive products in the space.
It has a 12-month trailing dividend yield of 0.81%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
For PBJ, it has heaviest allocation in the Consumer Staples sector --about 97.30% of the portfolio.
Looking at individual holdings, Archer-Daniels-Midland Co (ADM - Free Report) accounts for about 5.20% of total assets, followed by Hershey Co/the (HSY - Free Report) and General Mills Inc (GIS - Free Report) .
Its top 10 holdings account for approximately 45.81% of PBJ's total assets under management.
Performance and Risk
The ETF has added about 5.57% and is up about 16.44% so far this year and in the past one year (as of 04/29/2022), respectively. PBJ has traded between $40.33 and $49.16 during this last 52-week period.
PBJ has a beta of 0.67 and standard deviation of 18.97% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 32 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco Dynamic Food & Beverage ETF is a reasonable option for investors seeking to outperform the Consumer Staples ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
VanEck Future of Food ETF tracks ---------------------------------------- and the First Trust NASDAQ Food & Beverage ETF (FTXG - Free Report) tracks Nasdaq US Smart Food & Beverage Index. VanEck Future of Food ETF has $2.17 million in assets, First Trust NASDAQ Food & Beverage ETF has $809.95 million. YUMY has an expense ratio of 0.69% and FTXG charges 0.60%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Consumer Staples ETFs.
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.