🥫 Consumer Staples ETFs
🥫 Consumer Staples ETFs
Consumer staples stocks represent what people need to buy — food, beverages, household products, toiletries. The sector is inherently defensive: people don’t stop buying toothpaste during recessions. When markets get volatile, staples hold up while discretionary names collapse.
Core ETFs compared
| ETF | Expense | Holdings | Weighting | AUM |
|---|---|---|---|---|
| XLP | 0.08% | ~40 | Cap-weighted | ~$15B |
| VDC | 0.10% | ~100 | Cap-weighted | ~$8.5B |
| FSTA | 0.08% | ~100 | Cap-weighted | ~$1.3B |
| RSPS | 0.40% | ~40 | Equal-weighted | — |
Top holdings (XLP)
| Stock | Weight |
|---|---|
| Walmart (WMT) | ~11% |
| Costco (COST) | ~10% |
| Procter & Gamble (PG) | ~9% |
| Coca-Cola (KO) | ~6% |
| PepsiCo (PEP) | ~5% |
Staples are more diversified than discretionary — top holdings are 10-12% vs 20%+ for XLY.
Why staples are defensive
| Characteristic | Why It Matters |
|---|---|
| Lower beta (~0.6-0.7) | Less volatile than market |
| Steady earnings | Demand consistent regardless of economy |
| Dividend yield (~2.5-3%) | Higher than growth sectors |
| Recession resistance | Essential spending continues |
The trade-off: Staples typically underperform during bull markets when money flows to growth.
RSPS — The equal-weight alternative
RSPS removes Walmart/Costco dominance:
| Factor | XLP | RSPS |
|---|---|---|
| Walmart weight | ~11% | ~2.5% |
| Costco weight | ~10% | ~2.5% |
| Top 10 weight | ~65% | ~25% |
| Expense | 0.08% | 0.40% |
Use RSPS when you want more exposure to food/beverage producers vs. retailers.
Which ETF when?
| Situation | Best Choice |
|---|---|
| Options trading | XLP (best liquidity) |
| Long-term defensive | XLP or FSTA (0.08%) |
| Broader diversification | VDC or FSTA (~100 holdings) |
| Reduce retail concentration | RSPS |
| Tactical risk-off trade | XLP |
Yield comparison
| ETF | Approximate Yield |
|---|---|
| XLP | ~2.5-2.8% |
| VDC | ~2.4-2.7% |
| FSTA | ~2.4-2.7% |
| RSPS | ~2.0-2.5% |
Yields vary with price — when staples rally during risk-off, yields compress.
Quick reference
| ETF | Type | Best For |
|---|---|---|
XLP | Core | Trading, options, tactical defense |
VDC | Core | Long-term diversified holding |
FSTA | Core | Lowest cost broad holding |
RSPS | Equal-weight | Reduced retail concentration |
For signal interpretation and defensive rotation strategies, see Consumer Signals.
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