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Should You Invest in the Consumer Staples Select Sector SPDR ETF (XLP)?
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Designed to provide broad exposure to the Consumer Staples - Broad segment of the equity market, the Consumer Staples Select Sector SPDR ETF (XLP - Free Report) is a passively managed exchange traded fund launched on 12/16/1998.
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
Sector ETFs also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. Consumer Staples - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 12, placing it in bottom 25%.
Index Details
The fund is sponsored by State Street Global Advisors. It has amassed assets over $15.53 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
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
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 2.65%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many 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 Co/the (PG - Free Report) accounts for about 14.89% of total assets, followed by Costco Wholesale Corp (COST - Free Report) and Walmart Inc (WMT - Free Report) .
The top 10 holdings account for about 68.11% of total assets under management.
Performance and Risk
The ETF has lost about -2.62% and is down about -2.79% so far this year and in the past one year (as of 12/18/2023), respectively. XLP has traded between $66.22 and $77.50 during this last 52-week period.
The ETF has a beta of 0.61 and standard deviation of 13.59% for the trailing three-year period, making it a medium risk choice in the space. With about 40 holdings, it has more concentrated exposure than peers.
Alternatives
Consumer Staples Select Sector SPDR ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, XLP is a sufficient option for those seeking exposure to the Consumer Staples ETFs area of the market. Investors might also want to consider some other ETF options in the space.
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 $1.31 billion in assets, Vanguard Consumer Staples ETF has $6.38 billion. IYK has an expense ratio of 0.40% 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)?
Designed to provide broad exposure to the Consumer Staples - Broad segment of the equity market, the Consumer Staples Select Sector SPDR ETF (XLP - Free Report) is a passively managed exchange traded fund launched on 12/16/1998.
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
Sector ETFs also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. Consumer Staples - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 12, placing it in bottom 25%.
Index Details
The fund is sponsored by State Street Global Advisors. It has amassed assets over $15.53 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
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
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 2.65%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many 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 Co/the (PG - Free Report) accounts for about 14.89% of total assets, followed by Costco Wholesale Corp (COST - Free Report) and Walmart Inc (WMT - Free Report) .
The top 10 holdings account for about 68.11% of total assets under management.
Performance and Risk
The ETF has lost about -2.62% and is down about -2.79% so far this year and in the past one year (as of 12/18/2023), respectively. XLP has traded between $66.22 and $77.50 during this last 52-week period.
The ETF has a beta of 0.61 and standard deviation of 13.59% for the trailing three-year period, making it a medium risk choice in the space. With about 40 holdings, it has more concentrated exposure than peers.
Alternatives
Consumer Staples Select Sector SPDR ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, XLP is a sufficient option for those seeking exposure to the Consumer Staples ETFs area of the market. Investors might also want to consider some other ETF options in the space.
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 $1.31 billion in assets, Vanguard Consumer Staples ETF has $6.38 billion. IYK has an expense ratio of 0.40% 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.