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

Designed to provide broad exposure to the Consumer Staples - Food & Beverage segment of the equity market, the Invesco Dynamic Food & Beverage ETF (PBJ) is a passively managed exchange traded fund launched on 06/23/2005.

Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also 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 15, placing it in bottom 6%.

Index Details

The fund is sponsored by Invesco. It has amassed assets over $218.76 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

Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.

Annual operating expenses for this ETF are 0.63%, making it one of the more expensive products in the space.

It has a 12-month trailing dividend yield of 0.80%.

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 97.30% of the portfolio.

Looking at individual holdings, Archer-Daniels-Midland Co (ADM) accounts for about 5.20% of total assets, followed by Hershey Co/the (HSY) and General Mills Inc (GIS).

The top 10 holdings account for about 45.81% of total assets under management.

Performance and Risk

The ETF has added about 6.45% and is up roughly 18.51% so far this year and in the past one year (as of 04/15/2022), respectively. PBJ has traded between $40.33 and $48.08 during this last 52-week period.

The ETF has a beta of 0.67 and standard deviation of 18.87% 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 reasonable 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) tracks ---------------------------------------- and the First Trust NASDAQ Food & Beverage ETF (FTXG) tracks Nasdaq US Smart Food & Beverage Index. VanEck Future of Food ETF has $2.26 million in assets, First Trust NASDAQ Food & Beverage ETF has $11.37 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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Invesco Dynamic Food & Beverage ETF (PBJ): ETF Research Reports
 
Hershey Company The (HSY) : Free Stock Analysis Report
 
General Mills, Inc. (GIS) : Free Stock Analysis Report
 
Archer Daniels Midland Company (ADM) : Free Stock Analysis Report
 
First Trust NASDAQ Food & Beverage ETF (FTXG): ETF Research Reports
 
VanEck Future of Food ETF (YUMY): ETF Research Reports
 
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