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Invesco Dynamic Food & Beverage ETF (PBJ) offers concentrated exposure to the consumer staples sector. It holds stocks primarily from the packaged foods & meats, food retail, food distributors, and soft drink industries. The ETF is linked to an index that utilizes quantitative analysis and stock screening to identify appropriate stocks.
PBJ uses quant screens based on five factors: price momentum, earnings momentum, quality, management action, and value.
The stock market has witnessed a rough year amid persistently high inflation, the Fed’s aggressive rate hikes, and geopolitical instability. Last week, the Fed raised its benchmark interest rates by 75 basis points for the fourth consecutive time this year, even at the risk of forcing a recession.
Fed Chair Jerome Powell indicated slowing the pace of rate hikes but added that it is “very premature to think about pausing” rate hikes and that the terminal rate would go higher than expected.
Furthermore, according to the latest Bureau of Labor Statistics data, the Consumer Price Index (CPI) rose 7.7% year-over-year through October, slower than economists’ expectations. Despite inflation cooling more than expected in October, consumer prices remained near a multi-decade high, which could affect millions of U.S. households and businesses.
Amid such uncertain market conditions, the consumer staples sector remained a top performer due to its defensive nature since it enjoys an inelastic demand for its products. Thus, the consumer staples ETF, PBJ, can be considered a good hedge against recession.
The fund has gained 8% over the past month and 2.4% year-to-date to close the last trading session at $46.66.
Here are the factors that could influence PBJ’s performance in the near term:
Impressive Fund Stats
PBJ tracks the Dynamic Food & Beverage Intellidex Index. It has assets under management of $346.90 million. Its expense ratio of 0.63% compares to the category average of 0.45%. The fund has net inflows of…
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