A recurring theme of our features about ETFs in the last few weeks has revolved around trying to find the last bastions of safe investing in a market where uncertainty and fear prevail. In this week’s ETF Talk, we focus on PowerShares Dynamic Food & Beverage ETF (PBJ), yet another fund that offers you a measure of protection from a weak economy.
The ETF seeks investment results that generally correspond (before fees and expenses) to the price and yield of the Dynamic Food & Beverage IntellidexSM Index. The fund normally invests at least 80% of total assets in common stocks of food and beverage companies. The fund generally will invest at least 90% of its total assets in common stocks that comprise the Underlying Intellidex. The Intellidex consists of stocks of 30 U.S. food and beverage companies that manufacture, sell or distribute food and beverage products, agricultural products and products related to the development of new food technologies.
This sector-specific ETF gives you a chance to invest in the relatively stable performance of companies that provide food, a basic necessity for our survival. PBJ lets you to take advantage of a very specific safe-haven sector. Even though consumers may cut spending, food is something that we can’t take out of our budgets. While we may go to restaurants less frequently or skip filet mignon in favor of hamburger, visits to the grocery store will continue. PBJ gives us a way to profit from the basic human need for food.
PBJ’s top 10 holdings include: Mead Johnson Nutrition Company, 5.09%; H.J. Heinz Company, 5.08%; McDonald’s Corporation, 5.04%; Kraft Foods Inc, 5.02%; Archer-Daniels Midland Company, 4.92%; The Kroger Co, 4.89%; The Coca-Cola Co, 4.83%; B&G Foods Inc., 3.28%; Fresh Market Inc. 3.17%; and Domino’s Pizza Inc., 3.15%. In October, PBJ posted a gain of 6.55%. The fund now is up 13.27% for the past year through the end of October.
As news reports continue to reflect uncertainty about the economic climate in Europe and elsewhere, people still are buying bread, butter and milk. That’s why you should take a look at PBJ for an investment in the necessities.
As always, if you want my advice about buying and selling specific ETFs, including appropriate stop losses, please consider subscribing to my ETF Trader service. I am happy to answer your questions, so do not hesitate to email me by clicking here. You just may see your question answered in a future ETF Talk.