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We have identified the four best Consumer Staples ETFs based on performance, fees, and diversification. Let’s find out which is most suitable for your investing goals.
Best Consumer Staples ETFs: Overview
Here’s a look at the best Consumer Staples ETFs:
- Consumer Staples Select Sector SPDR Fund (XLP)
- Vanguard Consumer Staples ETF (VDC)
- iShares Global Consumer Staples (KXI)
- Invesco S&P 500 Equal Weight Consumer Staples ETF (RHS)
These consist of value stocks and dividend stocks that tend to trade at lower valuations.
In our analysis below, we will see what makes each of these exchange-traded funds unique.
Best Consumer Staples ETFs
#1. Consumer Staples Select Sector SPDR Fund (XLP)
- 1-Year Performance: +8.00%
- Expense Ratio: 0.10%
- Annual Dividend Yield: 2.48%
- AUM: $15.6 billion
- 3 Month Avg. Volume: 16,000,000
- Number of Holdings: 34
- Inception Date: 1998
The Consumer Staples Select Sector SPDR Fund invests in the Consumer Staples sector of the S&P 500 Index.
The Consumer Staples Select Sector SPDR Fund is the most popular Consumer Staples ETF on the market.
It has accumulated over $15 billion in assets since its first launching in 1998, which is more than double the next largest fund in the space.
The 33 companies in XLP conduct business in the food and staples retailing, beverage, food product, tobacco, household product, and personal product industries in the U.S.
These are the large-capincumbents of the Consumer Staples sector.
Also, XLP’s 2.48% dividend yield makes it the highest-yielding fund on our list.
XLP Top Holdings:
- Procter & Gamble (PG) 15.01%
- Coca-Cola Company (KO) 10.74%
- PepsiCo (PEP) 10.52%
- Costco Wholesale (COST) 10.41%
- Walmart (WMT) 4.44%
#2. Vanguard Consumer Staples ETF (VDC)
- 1-Year Performance: +7.00%
- Expense Ratio: 0.10%
- Annual Dividend Yield: 2.42%
- AUM: $6.9 billion
- 3 Month Avg. Volume: 251,000
- Number of Holdings: 103
- Inception Date: 2004
The Vanguard Consumer Staples ETF provides multi-cap exposure to the Consumer Staples sector.
VDC’s top holdings are similar to those of XLP – the likes of Procter & Gamble, Coca-Cola, PepsiCo, and Costco – but VDC has smaller allocations to them.
The Vanguard Consumer Staples ETF holds approximately 100 stocks while XLP holds 34.
In our view, VDC is more diversified than XLP.
Please note that “more diversification” does not make one fund better than another; you don’t want to diversify your portfolio out of the winners.
The optimal amount of diversification varies by the investor. Depending on your preferences, the choice between VDC and XLP should be apparent.
VDC Top Holdings:
- Procter & Gamble (PG) 13.22%
- Coca-Cola Company (KO) 9.69%
- PepsiCo (PEP) 8.53%
- Costco Wholesale (COST) 7.70%
- Walmart (WMT) 6.70%
#3. iShares Global Consumer Staples (KXI)
- 1-Year Performance: -1.00%
- Expense Ratio: 0.43%
- Annual Dividend Yield: 2.34%
- AUM: $1.1 billion
- 3 Month Avg. Volume: 109,000
- Number of Holdings: 96
- Inception Date: 2006
The iShares Global Consumer Staples ETF invests in global equities that produce essential products such as food, tobacco, and household items.
This ETF is for you if you’re seeking exposure to Consumer Staples stocks from around the world.
About half the fund is invested in the United States, followed by the UK (13%), Switzerland (10%), Japan (6%), France (6%), and the remaining invested in Canada, Netherlands, Australia, Belgium, and Germany.
The global exposure provided by KXI comes with a cost. Its 0.43% expense ratio is much higher than XLP and VDC.
KXI Top Holdings:
- Procter & Gamble (PG) 8.77%
- Nestle SA (NESN) 8.62%
- Costco Wholesale (COST) 4.57%
- Coca-Cola Company (KO) 4.55%
- PepsiCo (PEP) 4.42%
#4. Invesco S&P 500 Equal Weight Consumer Staples ETF (RHS)
- 1-Year Performance: +11.00%
- Expense Ratio: 0.40%
- Annual Dividend Yield: 2.09%
- AUM: $629 million
- 3 Month Avg. Volume: 50,000
- Number of Holdings: 34
- Inception Date: 2006
The Invesco S&P 500 Equal Weight Consumer Staples ETF is an equal-weighted fund that invests in the Consumer Staples sector of the S&P 500 Index.
RHS has the same holdings as the Consumer Staples Select Sector SPDR Fund (XLP), but instead, each holding in RHS receives a somewhat identical allocation.
This ETF is for you if you want balanced exposure to the large-cap Consumer Staples incumbents.
RHS is a better option than XLP if a 16% allocation to Procter & Gamble makes you uneasy, or if you don’t like how the top ten holdings in XLP account for 72% of the fund’s total assets.
RHS Top Holdings:
- Lamb Weston Holdings (LW) 3.55%
- Costco Wholesale (COST) 3.41%
- Brown-Forman (BF.B) 3.24%
- Monster Beverage (MNST) 3.22%
- General Mills (GIS) 3.21%
Alternatives to Consumer Staples ETFs
Here are some additional Consumer Staples ETFs to consider:
- Fidelity Covington Trust MSCI Consumer Staples Index ETF (FSTA)
- iShares U.S. Consumer Staples ETF (IYK)
- Invesco Dynamic Food & Beverage ETF (PBJ)
- Invesco S&P SmallCap Consumer Staples ETF (PSCC)
- iShares Europe ETF (IEV)
There are also several leveraged consumer ETFs for day trading, such as the ProShares Ultra Consumer Goods (UGE) and the ProShares Ultrashort Consumer Goods (SZK).
Frequently Asked Questions
What is a good consumer staples ETF?
The Consumer Staples Select Sector SPDR Fund (XLP) and the Vanguard Consumer Staples ETF (VDC) are good consumer staples ETFs to buy if you’re seeking diversified exposure to this sector of the economy.
Are consumer staples a good investment?
Consumer staples tend to be a good investment during periods of economic turmoil. Companies that produce essential goods like food, beverages, and consumer products come into favor when investors turn to value-oriented equities.
Does Vanguard have a consumer staples ETF?
The Vanguard Consumer Staples ETF (VDC) invests in 100+ equities in the consumer staples sector. It provides multi-cap exposure across the entire industry.
Bottom Line
There you have it – the best Consumer Staples ETFs. Each of them optimizes a particular variable, and it’s up to you to decide which is most important.
This article is for informational purposes only, and it is not intended to be investment advice. Read our editorial guidelines and public equities research methodology to learn more about how we selected the best Consumer Staples ETFs.
This article was updated on August 8th, 2022 to reflect the changes in performance, holdings, and other relevant characteristics of each fund.
