Which Is the Better Food and Beverage ETF, Invesco's PBJ or First Trust's FTXG?

Key Points

FTXG charges a nearly identical expense ratio to PBJ but offers a higher dividend yield.

PBJ has outperformed FTXG over the past year and five-year period, with a smaller historical drawdown.

Both ETFs focus on food and beverage stocks, but FTXG leans even more heavily into Consumer Defensive names.

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The Invesco Food & Beverage ETF (NYSEMKT:PBJ) and First Trust Nasdaq Food & Beverage ETF (NASDAQ:FTXG) both target U.S. food and beverage stocks, but PBJ has delivered stronger historical returns and less volatility, while FTXG trades with a higher yield and slightly lower expense ratio.

Both PBJ and FTXG offer focused exposure to the U.S. food and beverage sector, appealing to investors seeking defensive industry characteristics. This comparison looks at how each fund stacks up on cost, recent performance, risk, portfolio makeup, and liquidity to help investors weigh which approach may better match their goals.

Snapshot (cost & size)

| Metric | PBJ | FTXG | |---|---|---| | Issuer | Invesco | First Trust | | Expense ratio | 0.61% | 0.60% | | 1-yr return (as of 2026-04-22) | 8.4% | (4.5%) | | Dividend yield | 1.5% | 2.7% | | Beta | 0.50 | 0.38 | | AUM | $92.7 million | $20.7 million |

Beta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr return represents total return over the trailing 12 months.

PBJ and FTXG are nearly identical on cost, with FTXG fractionally more affordable. However, FTXG stands out for its higher dividend yield, which may appeal to income-focused investors.

Performance & risk comparison

| Metric | PBJ | FTXG | |---|---|---| | Max drawdown (5 y) | (15.82%) | (21.69%) | | Growth of $1,000 over 5 years | $1,284 | $948 |

What's inside

FTXG tracks a Nasdaq index focused on U.S. food and beverage companies, with 94% of assets in Consumer Defensive stocks. It holds 31 companies, with recent top weights in Archer-Daniels-Midland Company (NYSE:ADM), Mondelez International, Inc. (NASDAQ:MDLZ), and PepsiCo, Inc. (NASDAQ:PEP). The fund has been operating for nearly 10 years, reflecting a strong bias toward large, established brands in the sector.

PBJ also holds 31 stocks but mixes in a modest allocation to Consumer Cyclical and Basic Materials. Its largest positions recently included Archer-Daniels-Midland Co (NYSE:ADM), Corteva Inc (NYSE:CTVA), and Kroger Co. (NYSE:KR), giving it a slightly broader industry mix. Both funds lack leverage, currency hedging, or other notable quirks.

For more guidance on ETF investing, check out the full guide at this link.

What this means for investors

The Invesco Food & Beverage ETF (PBJ) and First Trust Nasdaq Food & Beverage ETF (FTXG) are for investors seeking defensive, income-oriented stocks as a hedge against market volatility to add to their portfolio. Since both funds target the same sector with similar expense ratios, choosing between them comes down to a few key considerations.

FTXG seeks to replicate the performance of the Nasdaq US Smart Food & Beverage Index, which uses a factor-weighted approach to select its stocks, based on components such as cash flow and return on assets. This helped the ETF achieve a higher dividend yield than PBJ but a terrible one-year return. FTXG is for those who want the low beta and stable passive income afforded by the fund.

PBJ is focused on capital appreciation, which helped it achieve a far stronger one-year return compared to FTXG, and a lower max drawdown over the past five years. The fund is for investors who prioritize overall growth over the immediate income delivered by FTXG’s higher dividend yield.

Since both ETFs hold around 30 stocks centered on the food and beverage sector, they do not provide much diversification. They’re meant to complement other holdings in your portfolio. Therefore, the choice between these two ultimately comes down to which best helps you achieve your investment goals.

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Robert Izquierdo has positions in PepsiCo. The Motley Fool recommends Kroger. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.