Looking for broad exposure to the Consumer Staples - Food & Beverage segment of the equity market? You should consider the First Trust NASDAQ Food & Beverage ETF (
FTXG Quick Quote FTXG - Free Report) , a passively managed exchange traded fund launched on 09/20/2016.
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they 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 11, placing it in bottom 31%.
The fund is sponsored by First Trust Advisors. It has amassed assets over $892.10 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. FTXG seeks to match the performance of the Nasdaq US Smart Food & Beverage Index before fees and expenses.
The Nasdaq US Smart Food & Beverage Index is a modified factor weighted index, designed to provide exposure to US companies within the food and beverage industry.
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.60%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.56%.
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.
This ETF has heaviest allocation in the Consumer Staples sector--about 95.70% of the portfolio.
Looking at individual holdings, Molson Coors Beverage Company (
TAP Quick Quote TAP - Free Report) accounts for about 8.35% of total assets, followed by Kellogg Company ( K Quick Quote K - Free Report) and Tyson Foods, Inc. (class A) ( TSN Quick Quote TSN - Free Report) .
The top 10 holdings account for about 58.92% of total assets under management.
Performance and Risk
The ETF return is roughly 4.50% and is up about 11.08% so far this year and in the past one year (as of 09/01/2022), respectively. FTXG has traded between $24 and $28.98 during this last 52-week period.
The ETF has a beta of 0.60 and standard deviation of 21.41% for the trailing three-year period. With about 31 holdings, it has more concentrated exposure than peers.
First Trust NASDAQ Food & Beverage ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, FTXG is a sufficient option for those seeking exposure to the Consumer Staples ETFs area of the market. Investors might also want to consider some other ETF options in the space.
VanEck Future of Food ETF (
YUMY Quick Quote YUMY - Free Report) tracks ---------------------------------------- and the Invesco Dynamic Food & Beverage ETF ( PBJ Quick Quote PBJ - Free Report) tracks Dynamic Food & Beverage Intellidex Index. VanEck Future of Food ETF has $2.88 million in assets, Invesco Dynamic Food & Beverage ETF has $322.75 million. YUMY has an expense ratio of 0.69% and PBJ charges 0.63%. Bottom Line
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Zacks ETF Center.