If you're interested in broad exposure to the Consumer Staples - Food & Beverage segment of the equity market, look no further than the First Trust NASDAQ Food & Beverage ETF (FTXG), a passively managed exchange traded fund launched on 09/20/2016.
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.
Sector ETFs also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. Consumer Staples - Food & Beverage is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 4, placing it in top 25%.
The fund is sponsored by First Trust Advisors. It has amassed assets over $941.60 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. FTXG seeks to match the performance of the Nasdaq US Smart Food & Beverage Index before fees and expenses.
The Nasdaq US Smart Food & Beverage Index is a modified factor weighted index, designed to provide exposure to US companies within the food and beverage industry.
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.60%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.52%.
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 96.20% of the portfolio.
Looking at individual holdings, Kellogg Company (K) accounts for about 8.14% of total assets, followed by Molson Coors Beverage Company (TAP) and Archer-Daniels-Midland Company (ADM).
The top 10 holdings account for about 58.08% of total assets under management.
Performance and Risk
The ETF has lost about -1.11% so far this year and is up about 3.57% in the last one year (as of 01/05/2023). In that past 52-week period, it has traded between $24.82 and $28.98.
The ETF has a beta of 0.62 and standard deviation of 21.91% for the trailing three-year period. With about 31 holdings, it has more concentrated exposure than peers.
First Trust NASDAQ Food & Beverage ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, FTXG is a great option for investors seeking exposure to the Consumer Staples ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
VanEck Future of Food ETF (YUMY) tracks ---------------------------------------- and the Invesco Dynamic Food & Beverage ETF (PBJ) tracks Dynamic Food & Beverage Intellidex Index. VanEck Future of Food ETF has $2.74 million in assets, Invesco Dynamic Food & Beverage ETF has $366.84 million. YUMY has an expense ratio of 0.69% and PBJ charges 0.63%.
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.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.Get it free >>
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.