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Should You Invest in the Consumer Staples Select Sector SPDR ETF (XLP)?
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If you're interested in broad exposure to the Consumer Staples - Broad segment of the equity market, look no further than the Consumer Staples Select Sector SPDR ETF (XLP - Free Report) , a passively managed exchange traded fund launched on 12/16/1998.
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.
Additionally, sector ETFs offer convenient ways 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 12, placing it in bottom 25%.
Index Details
The fund is sponsored by State Street Global Advisors. It has amassed assets over $15.07 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 2.58%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, 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 Co/the (PG - Free Report) accounts for about 13.98% of total assets, followed by Costco Wholesale Corp (COST - Free Report) and Pepsico Inc (PEP - Free Report) .
The top 10 holdings account for about 67.12% of total assets under management.
Performance and Risk
Year-to-date, the Consumer Staples Select Sector SPDR ETF return is roughly 1.74% so far, and is up about 3.34% over the last 12 months (as of 02/19/2024). XLP has traded between $66.22 and $77.50 in this past 52-week period.
The ETF has a beta of 0.59 and standard deviation of 13.61% 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 good 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 $1.26 billion in assets, Vanguard Consumer Staples ETF has $6.61 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)?
If you're interested in broad exposure to the Consumer Staples - Broad segment of the equity market, look no further than the Consumer Staples Select Sector SPDR ETF (XLP - Free Report) , a passively managed exchange traded fund launched on 12/16/1998.
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.
Additionally, sector ETFs offer convenient ways 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 12, placing it in bottom 25%.
Index Details
The fund is sponsored by State Street Global Advisors. It has amassed assets over $15.07 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 2.58%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, 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 Co/the (PG - Free Report) accounts for about 13.98% of total assets, followed by Costco Wholesale Corp (COST - Free Report) and Pepsico Inc (PEP - Free Report) .
The top 10 holdings account for about 67.12% of total assets under management.
Performance and Risk
Year-to-date, the Consumer Staples Select Sector SPDR ETF return is roughly 1.74% so far, and is up about 3.34% over the last 12 months (as of 02/19/2024). XLP has traded between $66.22 and $77.50 in this past 52-week period.
The ETF has a beta of 0.59 and standard deviation of 13.61% 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 good 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 $1.26 billion in assets, Vanguard Consumer Staples ETF has $6.61 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.