PBJ vs. XLP: Which Consumer Staples ETF Is the Better Bet?
XLP's lower fees and higher dividend yield have driven superior five-year returns, but PBJ offers concentrated food-and-beverage exposure for tactical investors.
The Invesco Food & Beverage ETF (PBJ) and the State Street Consumer Staples Select Sector SPDR ETF (XLP) are both investment vehicles focused on the consumer staples sector. However, they differ in several key ways. PBJ utilizes a dynamic indexing strategy, providing specific exposure to food industry stocks. Conversely, XLP offers broad, low-cost access to the S&P 500 consumer staples.
Investors often gravitate towards consumer staples as a defensive asset class during market downturns. Despite targeting the same sector, the two funds have notable differences in cost, total assets under management, and the breadth of their underlying portfolios. This analysis aims to shed light on how the more targeted PBJ compares to the diversified giant, XLP.
Beta, a measure of price volatility relative to the S&P 500, is calculated based on monthly returns over the fund's history (up to five years). The 1-year return represents total returns over the trailing 12-month period. Dividend yield is calculated using the trailing-12-month distribution yield.
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