Which Invesco Defensive ETF is the Better Buy?

The Invesco S&P 500 Equal Weight Consumer Staples ETF (RSPS +1.46%) and the** Invesco Food & Beverage ETF** (PBJ +0.66%) both concentrate on the defensive corner of the market, but their approaches diverge.

While RSPS tracks an equal-weighted slice of S&P 500 consumer staples, PBJ uses a rules-based strategy to select 30 U.S. food and beverage companies. This comparison examines costs, performance, risk, and the contents of each ETF.

Snapshot (cost & size)

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

RSPS looks more affordable with a 0.40% expense ratio compared to PBJ’s 0.61%, and it also offers a higher dividend yield at 2.6% versus 1.7% for PBJ.

Performance & risk comparison

What’s inside

PBJ targets a mix of 32 companies focused on food and beverage stocks, with 37% in packaged foods and meats and 18% in soft drinks. Its largest holdings as of the latest data are Hershey (HSY +0.81%), Sysco Corp (SYY +0.43%), and PepsiCo (PEP +1.39%), each around 5%. PBJ’s selection process goes beyond simple size, using factors like price momentum and management action, and the fund has been operating for over 20 years.

In contrast, RSPS is dedicated strictly to consumer defensive stocks from the S&P 500, equally weighting 38 holdings such as Bunge Global SA (BG +3.10%), Colgate-Palmolive Co (CL +1.54%), and Hershey. This approach results in a pure-play consumer staples exposure, with quarterly rebalancing and no sector drift beyond its mandate.

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What this means for investors

The Invesco S&P 500 Equal Weight Consumer Staples ETF is broader in scope, containing food and beverage stocks as well as consumer staples, household products, tobacco, and personal care stocks. It is also more diversified due to its equal-weighting format as no one stock makes up more than 3% of the portfolio.

The PBJ portfolio is slightly more concentrated with 32 stocks. It tracks the  Dynamic Food & Beverage Intellidex Index, which includes food and beverage stocks screened for price momentum, earnings momentum, quality, management action, and value. It includes small- and mid-cap stocks in addition to large caps.

RSPS has outperformed over the past year, returning 14.5% in the past 12 months and 13.5% year-to-date. PBJ is up 11% YTD but has only gained 6% over the past 12 months.

Over the longer term, PBJ has been the better performer, with a 10-year annualized return of 5% versus 3.7% for RSPS. But the Invesco S&P 500 Equal Weight Consumer Staples ETF has a significantly higher dividend yield and a lower expense ratio, making it a better buy. When you examine the total returns with dividends reinvested, the 10-year returns are about the same.