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Is Invesco Dynamic Food & Beverage ETF (PBJ) a Strong ETF Right Now?
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The Invesco Dynamic Food & Beverage ETF (PBJ - Free Report) was launched on 06/23/2005, and is a smart beta exchange traded fund designed to offer broad exposure to the Consumer Staples ETFs category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
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.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
The fund is managed by Invesco. PBJ has been able to amass assets over $292.88 million, making it one of the average sized ETFs in the Consumer Staples ETFs. This particular fund 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.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Operating expenses on an annual basis are 0.63% for PBJ, making it on par with most peer products in the space.
PBJ's 12-month trailing dividend yield is 2.35%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
Representing 94.60% of the portfolio, the fund has heaviest allocation to the Consumer Staples sector.
Looking at individual holdings, General Mills Inc (GIS - Free Report) accounts for about 5.22% of total assets, followed by Hershey Co/the (HSY - Free Report) and Mondelez International Inc (MDLZ - Free Report) .
Its top 10 holdings account for approximately 46.13% of PBJ's total assets under management.
Performance and Risk
Year-to-date, the Invesco Dynamic Food & Beverage ETF has lost about -0.47% so far, and was up about 3.99% over the last 12 months (as of 07/10/2023). PBJ has traded between $42.01 and $48.41 in this past 52-week period.
The fund has a beta of 0.62 and standard deviation of 14.91% for the trailing three-year period, which makes PBJ a medium risk choice in this particular 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 $2.58 million in assets, First Trust NASDAQ Food & Beverage ETF has $995.45 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?
The Invesco Dynamic Food & Beverage ETF (PBJ - Free Report) was launched on 06/23/2005, and is a smart beta exchange traded fund designed to offer broad exposure to the Consumer Staples ETFs category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
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.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
The fund is managed by Invesco. PBJ has been able to amass assets over $292.88 million, making it one of the average sized ETFs in the Consumer Staples ETFs. This particular fund 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.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Operating expenses on an annual basis are 0.63% for PBJ, making it on par with most peer products in the space.
PBJ's 12-month trailing dividend yield is 2.35%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
Representing 94.60% of the portfolio, the fund has heaviest allocation to the Consumer Staples sector.
Looking at individual holdings, General Mills Inc (GIS - Free Report) accounts for about 5.22% of total assets, followed by Hershey Co/the (HSY - Free Report) and Mondelez International Inc (MDLZ - Free Report) .
Its top 10 holdings account for approximately 46.13% of PBJ's total assets under management.
Performance and Risk
Year-to-date, the Invesco Dynamic Food & Beverage ETF has lost about -0.47% so far, and was up about 3.99% over the last 12 months (as of 07/10/2023). PBJ has traded between $42.01 and $48.41 in this past 52-week period.
The fund has a beta of 0.62 and standard deviation of 14.91% for the trailing three-year period, which makes PBJ a medium risk choice in this particular 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 $2.58 million in assets, First Trust NASDAQ Food & Beverage ETF has $995.45 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.