You can see here that while FITS has a higher focus in Durables/Apparel, BFIT has a higher focus in Food & Beverage.  (A deeper dive shows that very unsurprisingly neither ETF has Tobacco exposure!)

Another view that can help explain some of the discrepancy is the holding concentration.  While BFIT has approximately 1/3 of its exposure in the top ten stocks, FITS has nearly 60% of its exposure in the top ten.  Much of this dispersion is caused by a much higher allocation to Nike, at almost 20% of the fund (BFIT has an approximate 3% allocation).

Going back to the differential in the Food and Beverage exposure lends itself to another differential:

  • FITS invests in companies “… that are positioned to profit from servicing those participating in health and fitness activities”.
  • BFIT invests in companies “… that provide products and services aimed at promoting physical wellness through active and healthy lifestyles”.

So taking a holistic look, while FITS focuses more strictly on fitness, BFIT more broadly focuses on wellness of which fitness is one aspect in addition to (as defined in the same infographic as above) Happiness, Treatments, and Healthy Eating.  In other words, FITS could be viewed as a subset of BFIT.

(While not getting into details, some of these other themes are captured in other thematic offerings via Janus, such as ORG – The Organics ETF)

Outside of these sector and industry exposures, a couple other differences include:

  • BFIT has a bit more Emerging Markets exposure than FITS (about 10%) from some exposure in China and Taiwan.
  • As both ETFs have a Global mandate, they will have a degree of foreign currency risk. FITS has approximately 32% non-USD exposure while BFIT has approximately 49%.

Regardless of the difference, both ETFs offer a mechanism to get exposure to what I think is an intriguing theme in the marketplace as fitness and wellness continue to have an important (and seemingly increased) focus in people’s lives.

Clayton Fresk is a Portfolio Manager at Stadion Money Management, a participant in the ETF Strategist Channel.

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Disclosure Information:

Past performance is no guarantee of future results. Investments are subject to risk and any investment strategy may lose money. The investment strategies presented are not appropriate for every investor and financial advisors should review the terms and conditions and risks involved. Some information contained herein was prepared by or obtained from sources that Stadion believes to be reliable. There is no assurance that any of the target prices or other forward-looking statements mentioned will be attained. Any market prices are only indications of market values and are subject to change. Any references to specific securities or market indexes are for informational purposes only. They are not intended as specific investment advice and should not be relied on for making investment decisions. Founded in 1993, Stadion Money Management is a privately owned money management firm based near Athens, Georgia. Via its unique approach and suite of nontraditional strategies with a defensive bias, Stadion seeks to help investors—through advisors or retirement plans—protect and grow their “serious money.” Contact Stadion at 800-222-7636 or www.stadionmoney.com. SMM-062016-384

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