The Vanguard Consumer Staples ETF (VDC +0.47%) offers broader diversification across 103 holdings, while the State Street Consumer Staples Select Sector SPDR ETF (XLP +0.61%) provides a more concentrated portfolio at a slightly lower cost.
Both funds target the defensive consumer staples sector, providing exposure to non-discretionary goods like food, beverages, and household items. While they share similar goals, differences in index construction and concentration levels create distinct risk-reward profiles for investors seeking stability in volatile markets. VDC and XLP remain popular choices for those prioritizing capital preservation.
Snapshot (cost & size)
| Metric | XLP | VDC |
|---|---|---|
| Issuer | SPDR | Vanguard |
| Expense ratio | 0.08% | 0.09% |
| 1-yr return (as of May 6, 2026) | 6.40% | 7.20% |
| Dividend yield | 2.60% | 2.10% |
| Beta | 0.49 | 0.52 |
| Assets under management (AUM) | $14.6 billion | $9.2 billion |
Beta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.
The State Street fund is slightly more affordable with a 0.08% expense ratio. It also provides a higher payout for income-seekers, with a 2.60% distribution yield compared to the 2.10% offered by the Vanguard fund.
Performance & risk comparison
| Metric | XLP | VDC |
|---|---|---|
| Max drawdown (5 yr) | (16.30%) | (16.50%) |
| Growth of $1,000 over 5 years (total return) | $1,360 | $1,408 |
NYSEMKT: XLP
Key Data Points
What's inside
The Vanguard Consumer Staples ETF (VDC +0.47%) launched in 2004 and holds 103 stocks, providing broader coverage than many sector peers. Its largest positions include Walmart (WMT -0.62%) at 15.67%, Costco Wholesale (COST +1.39%) at 12.40%, and Procter & Gamble (PG +1.33%) at 9.22%. The portfolio focuses on the consumer defensive sector, which represents 98% of its weight. This ETF paid $4.82 per share over the trailing 12 months.
The State Street Consumer Staples Select Sector SPDR ETF (XLP +0.61%) offers more concentrated exposure with 36 holdings. Launched in 1998, it tracks the Consumer Staples Select Sector Index. Top holdings include Walmart (WMT -0.62%) at 11.93%, Costco Wholesale (COST +1.39%) at 9.55%, and Procter & Gamble (PG +1.33%) at 7.25%. The fund is 99% invested in consumer defensive stocks and has a trailing-12-month dividend of $2.18 per share.
For more guidance on ETF investing, check out the full guide at this link.
NYSEMKT: VDC
Key Data Points
What this means for investors
Consumer staples, which are the companies selling toothpaste, groceries, and household essentials, spent much of 2025 in the shadow of AI-driven growth stocks. That changed in early 2026. As tech valuations came under pressure and tariff uncertainty rattled markets, investors rotated into defensives, sending the sector to some of its strongest relative performance in years. Consumer staples won't lead in roaring bull markets, but they tend to hold up when everything else stumbles.
VDC and XLP both capture that defensive quality, but through different lenses. XLP draws exclusively from S&P 500 companies — the largest, most established staples names — resulting in a tight portfolio where Walmart, Costco, and Procter & Gamble dominate. VDC reaches further, holding over 100 companies including mid- and small-cap staples that don't qualify for the S&P 500.
Both funds charge essentially the same fee, making the choice about portfolio construction rather than cost. XLP is the more concentrated, large-cap-only expression of the sector. VDC offers a broader slice, including smaller staples companies that bring more diversification but also more volatility.
