Shares of fast food chain Jack in the Box (NasdaqGS: JACK) are up 1.3% and earlier touched an all-time high, extending a run that has seen California-based company climb 12.1% in just the past week.
Even with a one-year gain of almost 66%, Jack in the Box only recently graduated to mid-cap classification from small-cap territory. Said differently, Jack in the Box’s current make value of about $3.7 billion means the stock is not a prominent member of many exchange traded funds. Perhaps that means an intrepid ETF issuer should use this writer’s idea (and compensate him) and finally introduce a dedicated restaurant ETF.
Alas, that is a story for another day. The story today is if investors want to access Jack in the Box via ETFs, the PowerShares Dynamic Food & Beverage Portfolio (NYSEArca: PBJ) is the way to go. Just five ETFs feature JACK as a top 10 holding, according to S&P Capital IQ data. The research firm rates PBJ, which has $250.4 million in assets under management, marketweight. [A Sinfully Solid Staples ETF]
PBJ’s name appears to imply it is a different spin on the ordinary consumer staples ETF. That may be true to an extent, but it is not a pure staples ETF. Not with a 12.4% weight to consumer discretionary stocks, including JACK. The stock is 3.47% of PBJ’s weight, making it the ETF’s ninth-largest holding.
PBJ’s weight to JACK has paid dividends for the ETF’s investors. Not only has JACK crushed larger rivals McDonald’s (NYSE: MCD) and Yum Brands (NYSE: YUM) in terms of total returns over the past year, but JACK has also delivered nearly triple the returns of Chipotle (NYSE: CMG), perhaps the most beloved restaurant growth stock.
“PBJ is a unique as it offers small, mid and large cap exposure to consumer staples and some consumer discretionary stocks. While packaged foods is nearly half of the portfolio, restaurants and soft drinks make up meaningful exposure as well. Though relatively expensive, the ETF outperformed the S&P 500 consumer staples index in 2013 and 2014,” said S&P Capital IQ Director of Mutual Fund and ETF Research Todd Rosenbluth in an email to ETF Trends.
PBJ is an alternatively-weighted ETF. Second, due to the ETF’s focus on food and beverage names, PBJ features no exposure to the other usual suspects of the staples sector, such as household goods makers, tobacco companies or retailers like Wal-Mart (NYSE: WMT). [A Rush to Staples ETFs]
PBJ tracks the Dynamic Food & Beverage Intellidex Index, which evaluates possible constituents based on earnings and price momentum while also employing a quality filter and screening for management action and value.
PowerShares Dynamic Food & Beverage Portfolio
