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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) made its debut on 06/23/2005, and is a smart beta exchange traded fund that provides broad exposure to the Consumer Staples ETFs category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
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.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
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
PBJ is managed by Invesco, and this fund has amassed over $330.62 million, which makes it one of the average sized ETFs in the Consumer Staples ETFs. 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.
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.
Operating expenses on an annual basis are 0.63% for PBJ, making it one of the more expensive products in the space.
It's 12-month trailing dividend yield comes in at 0.94%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, 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, Keurig Dr Pepper Inc (KDP - Free Report) accounts for about 5.42% of total assets, followed by General Mills Inc (GIS - Free Report) and Sysco Corp (SYY - Free Report) .
PBJ's top 10 holdings account for about 47.34% of its total assets under management.
Performance and Risk
So far this year, PBJ has gained about 2.26%, and is up about 7.62% in the last one year (as of 11/03/2022). During this past 52-week period, the fund has traded between $41.39 and $49.16.
PBJ has a beta of 0.64 and standard deviation of 20.09% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 30 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco Dynamic Food & Beverage ETF is an excellent option for investors seeking to outperform the Consumer Staples ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
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 $2.73 million in assets, First Trust NASDAQ Food & Beverage ETF has $891.99 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) made its debut on 06/23/2005, and is a smart beta exchange traded fund that provides broad exposure to the Consumer Staples ETFs category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
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.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
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
PBJ is managed by Invesco, and this fund has amassed over $330.62 million, which makes it one of the average sized ETFs in the Consumer Staples ETFs. 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.
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.
Operating expenses on an annual basis are 0.63% for PBJ, making it one of the more expensive products in the space.
It's 12-month trailing dividend yield comes in at 0.94%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, 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, Keurig Dr Pepper Inc (KDP - Free Report) accounts for about 5.42% of total assets, followed by General Mills Inc (GIS - Free Report) and Sysco Corp (SYY - Free Report) .
PBJ's top 10 holdings account for about 47.34% of its total assets under management.
Performance and Risk
So far this year, PBJ has gained about 2.26%, and is up about 7.62% in the last one year (as of 11/03/2022). During this past 52-week period, the fund has traded between $41.39 and $49.16.
PBJ has a beta of 0.64 and standard deviation of 20.09% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 30 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco Dynamic Food & Beverage ETF is an excellent option for investors seeking to outperform the Consumer Staples ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
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 $2.73 million in assets, First Trust NASDAQ Food & Beverage ETF has $891.99 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.