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Should You Invest in the Consumer Staples Select Sector SPDR ETF (XLP)?
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The Consumer Staples Select Sector SPDR ETF (XLP - Free Report) was launched on 12/16/1998, and is a passively managed exchange traded fund designed to offer broad exposure to the Consumer Staples - Broad segment of the equity market.
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
Investor-friendly, sector ETFs provide many options to gain low risk and diversified exposure to a broad group of companies in particular sectors. Consumer Staples - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 10, placing it in bottom 38%.
Index Details
The fund is sponsored by State Street Global Advisors. It has amassed assets over $17 billion, making it the largest ETF attempting to match the performance of the Consumer Staples - Broad segment of the equity market. XLP seeks to match the performance of the Consumer Staples Select Sector Index before fees and expenses.
The Consumer Staples Select Sector Index seeks to provide an effective representation of the consumer staples sector of the S&P 500 Index.
Costs
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.10%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 2.50%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Consumer Staples sector--about 100% of the portfolio.
Looking at individual holdings, Procter & Gamble Company (PG - Free Report) accounts for about 15.20% of total assets, followed by Pepsico Inc. (PEP - Free Report) and Coca-Cola Company (KO - Free Report) .
The top 10 holdings account for about 69.41% of total assets under management.
Performance and Risk
Year-to-date, the Consumer Staples Select Sector SPDR ETF has lost about -0.13% so far, and is down about -0.14% over the last 12 months (as of 03/31/2023). XLP has traded between $66.50 and $80.57 in this past 52-week period.
The ETF has a beta of 0.58 and standard deviation of 15.04% for the trailing three-year period, making it a medium risk choice in the space. With about 35 holdings, it has more concentrated exposure than peers.
Alternatives
Consumer Staples Select Sector SPDR ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, XLP is a great option for investors seeking exposure to the Consumer Staples ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
IShares U.S. Consumer Staples ETF (IYK - Free Report) tracks Dow Jones U.S. Consumer Goods Index and the Vanguard Consumer Staples ETF (VDC - Free Report) tracks MSCI US Investable Market Consumer Staples 25/50 Index. IShares U.S. Consumer Staples ETF has $1.73 billion in assets, Vanguard Consumer Staples ETF has $6.73 billion. IYK has an expense ratio of 0.39% and VDC charges 0.10%.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Should You Invest in the Consumer Staples Select Sector SPDR ETF (XLP)?
The Consumer Staples Select Sector SPDR ETF (XLP - Free Report) was launched on 12/16/1998, and is a passively managed exchange traded fund designed to offer broad exposure to the Consumer Staples - Broad segment of the equity market.
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
Investor-friendly, sector ETFs provide many options to gain low risk and diversified exposure to a broad group of companies in particular sectors. Consumer Staples - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 10, placing it in bottom 38%.
Index Details
The fund is sponsored by State Street Global Advisors. It has amassed assets over $17 billion, making it the largest ETF attempting to match the performance of the Consumer Staples - Broad segment of the equity market. XLP seeks to match the performance of the Consumer Staples Select Sector Index before fees and expenses.
The Consumer Staples Select Sector Index seeks to provide an effective representation of the consumer staples sector of the S&P 500 Index.
Costs
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.10%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 2.50%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Consumer Staples sector--about 100% of the portfolio.
Looking at individual holdings, Procter & Gamble Company (PG - Free Report) accounts for about 15.20% of total assets, followed by Pepsico Inc. (PEP - Free Report) and Coca-Cola Company (KO - Free Report) .
The top 10 holdings account for about 69.41% of total assets under management.
Performance and Risk
Year-to-date, the Consumer Staples Select Sector SPDR ETF has lost about -0.13% so far, and is down about -0.14% over the last 12 months (as of 03/31/2023). XLP has traded between $66.50 and $80.57 in this past 52-week period.
The ETF has a beta of 0.58 and standard deviation of 15.04% for the trailing three-year period, making it a medium risk choice in the space. With about 35 holdings, it has more concentrated exposure than peers.
Alternatives
Consumer Staples Select Sector SPDR ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, XLP is a great option for investors seeking exposure to the Consumer Staples ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
IShares U.S. Consumer Staples ETF (IYK - Free Report) tracks Dow Jones U.S. Consumer Goods Index and the Vanguard Consumer Staples ETF (VDC - Free Report) tracks MSCI US Investable Market Consumer Staples 25/50 Index. IShares U.S. Consumer Staples ETF has $1.73 billion in assets, Vanguard Consumer Staples ETF has $6.73 billion. IYK has an expense ratio of 0.39% and VDC charges 0.10%.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.