Invesco vs. iShares: Which Consumer Staples ETF Is Better for Investors, PBJ or KXI?

The Invesco Food & Beverage ETF (NYSEMKT:PBJ) charges a higher expense ratio (0.61%) and focuses on U.S.-listed food and beverage stocks. In comparison, the iShares Global Consumer Staples ETF (NYSEMKT:KXI) has a lower expense ratio (0.39%), holds 96 global consumer staples companies, and had a higher one-year return (14.8% vs. 1.0%).

Both PBJ and KXI give investors exposure to companies that sell essential consumer goods, but their approaches differ in region, diversification, and cost. This comparison looks at each fund’s structure, returns, risk profile, and portfolio makeup to help clarify which may appeal to different types of investors.

Snapshot (cost & size)

Beta measures price volatility relative to the S&P 500; beta is calculated from five-year weekly returns. The one-year return represents total return over the trailing 12 months.

KXI is more affordable than PBJ thanks to its lower expense ratio, and it also pays a slightly higher dividend yield, which may appeal to income-focused investors. Both funds have betas well below the market, with PBJ at 0.65 and KXI at 0.55.

Performance & risk comparison

What's inside

KXI holds 96 global consumer staples stocks, providing exposure to household names from developed and emerging markets. Its sector allocation is heavily weighted toward consumer defensive companies (97%), with a small allocation to consumer cyclicals. Top holdings include Walmart, Costco Wholesale, and Philip Morris International. The fund has a long track record, with over 19 years in operation.

PBJ is more concentrated, holding just over 30 U.S.-listed stocks that are selected for momentum and quality within the food and beverage segment. Its portfolio is 89% consumer defensive, with minor exposure to basic materials and consumer cyclicals. Leading positions include Corteva, Monster Beverage, and The Hershey Company. PBJ follows a rules-based index that is rebalanced quarterly.

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What this means for investors

Over the last 20 years, KXI and PBJ have generated very similar total returns for investors, rising 7.6% and 7.4% each year, respectively. Given these similar returns over the long haul, I think picking between the two ETFs is mostly a matter of investing preferences, rather than either option being vastly superior to the other in terms of holdings.

If an investor just wanted pure safety, betting on 30 of the strongest U.S. food and beverage companies in PBJ is about as reliable as it gets. Especially so with the ETF trading at just 18 times earnings. That said, if you believe that success with GLP-1 drugs poses a significant threat to these companies, this may not be the uber-safe ETF it seems to be.

Should an investor want a bit more growth, higher income, or a lower expense ratio, KXI is probably the better pick. However, you’ll want to be comfortable owning Walmart and Costco, which equal 18% of the ETF’s holdings, and help explain why its average P/E ratio is higher at 25. KXI also has nearly 20% of its holdings in tobacco stocks, as well, if that is something you’d rather avoid.

Personally, I could only consider buying KXI. PBJ’s lofty expense ratio, smaller dividend yield, and larger exposure to GLP-1 risks leave me less interested in the ETF. While I’m not thoroughly convinced GLP-1s “doom” the food and beverage industry by any means, it just creates another potential headwind against the ETF I’d rather avoid, making KXI slightly safer in that sense.

Josh Kohn-Lindquist has positions in Costco Wholesale and Hershey. The Motley Fool has positions in and recommends Costco Wholesale, Hershey, Monster Beverage, and Walmart. The Motley Fool recommends Philip Morris International. The Motley Fool has a disclosure policy.