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Should You Invest in the Invesco Dynamic Food & Beverage ETF (PBJ)?

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If you're interested in broad exposure to the Consumer Staples - Food & Beverage segment of the equity market, look no further than the Invesco Dynamic Food & Beverage ETF (PBJ - Free Report) , a passively managed exchange traded fund launched on 06/23/2005.

Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.

Additionally, sector ETFs offer convenient ways 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 4, placing it in top 25%.

Index Details

The fund is sponsored by Invesco. It has amassed assets over $329.40 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

Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain 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 1.98%.

Sector Exposure and Top Holdings

While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, 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 93.80% of the portfolio.

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) .

The top 10 holdings account for about 46.13% of total assets under management.

Performance and Risk

Year-to-date, the Invesco Dynamic Food & Beverage ETF has added about 2.94% so far, and is down about -0.07% over the last 12 months (as of 04/25/2023). PBJ has traded between $42.01 and $48.41 in this past 52-week period.

The ETF has a beta of 0.63 and standard deviation of 15.60% for the trailing three-year period, making it a medium risk choice in the space. With about 32 holdings, it has more concentrated exposure than peers.

Alternatives

Invesco Dynamic 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, PBJ is a good 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 - Free Report) 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 $992.99 million. 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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