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Is Invesco Dynamic Food & Beverage ETF (PBJ) a Strong ETF Right Now?
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Designed to provide broad exposure to the Consumer Staples ETFs category of the market, the Invesco Dynamic Food & Beverage ETF (PBJ - Free Report) is a smart beta exchange traded fund launched on 06/23/2005.
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.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
The fund is managed by Invesco. PBJ has been able to amass assets over $335.71 million, making it one of the average sized ETFs in the Consumer Staples ETFs. Before fees and expenses, PBJ 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.
Operating expenses on an annual basis are 0.63% for PBJ, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 1.97%.
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.
PBJ's heaviest allocation is in the Consumer Staples sector, which is about 95.10% of the portfolio.
When you look at individual holdings, General Mills Inc (GIS - Free Report) accounts for about 5.22% of the fund's total assets, followed by Hershey Co/the (HSY - Free Report) and Mondelez International Inc (MDLZ - Free Report) .
PBJ's top 10 holdings account for about 46.13% of its total assets under management.
Performance and Risk
The ETF has gained about 3.72% and is up roughly 4.81% so far this year and in the past one year (as of 05/10/2023), respectively. PBJ has traded between $42.01 and $48.41 during this last 52-week period.
PBJ has a beta of 0.63 and standard deviation of 15.40% 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 $2.66 million in assets, First Trust NASDAQ Food & Beverage ETF has $1 billion. 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?
Designed to provide broad exposure to the Consumer Staples ETFs category of the market, the Invesco Dynamic Food & Beverage ETF (PBJ - Free Report) is a smart beta exchange traded fund launched on 06/23/2005.
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.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
The fund is managed by Invesco. PBJ has been able to amass assets over $335.71 million, making it one of the average sized ETFs in the Consumer Staples ETFs. Before fees and expenses, PBJ 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.
Operating expenses on an annual basis are 0.63% for PBJ, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 1.97%.
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.
PBJ's heaviest allocation is in the Consumer Staples sector, which is about 95.10% of the portfolio.
When you look at individual holdings, General Mills Inc (GIS - Free Report) accounts for about 5.22% of the fund's total assets, followed by Hershey Co/the (HSY - Free Report) and Mondelez International Inc (MDLZ - Free Report) .
PBJ's top 10 holdings account for about 46.13% of its total assets under management.
Performance and Risk
The ETF has gained about 3.72% and is up roughly 4.81% so far this year and in the past one year (as of 05/10/2023), respectively. PBJ has traded between $42.01 and $48.41 during this last 52-week period.
PBJ has a beta of 0.63 and standard deviation of 15.40% 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 $2.66 million in assets, First Trust NASDAQ Food & Beverage ETF has $1 billion. 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.