Should You Invest in the Consumer Staples Select Sector SPDR ETF (XLP)?

The Consumer Staples Select Sector SPDR ETF (XLP) was launched on December 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.While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.Sector ETFs are also funds of convenience, offering many 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 14, placing it in bottom 13%.Index DetailsThe fund is sponsored by State Street Investment Management. It has amassed assets over $15.2 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.CostsInvestors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.Annual operating expenses for this ETF are 0.08%, making it the least expensive product in the space.It has a 12-month trailing dividend yield of 2.73%.Sector Exposure and Top HoldingsIt is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. 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, Walmart Inc (WMT) accounts for about 10.48% of total assets, followed by Costco Wholesale Corp (COST) and Procter + Gamble Co/the (PG).The top 10 holdings account for about 61.53% of total assets under management.Performance and RiskSo far this year, XLP has added about 0.42%, and is down about 1.24% in the last one year (as of 11/12/2025). During this past 52-week period, the fund has traded between $75.6 and $83.6.The ETF has a beta of 0.52 and standard deviation of 11.72% 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.AlternativesConsumer 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.Fidelity MSCI Consumer Staples Index ETF (FSTA) tracks MSCI USA IMI Consumer Staples Index and the Vanguard Consumer Staples ETF (VDC) tracks MSCI US Investable Market Consumer Staples 25/50 Index. Fidelity MSCI Consumer Staples Index ETF has $1.29 billion in assets, Vanguard Consumer Staples ETF has $7.15 billion. FSTA has an expense ratio of 0.08%, and VDC charges 0.09%.Bottom LineTo 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.Boost Your Portfolio with Our Top ETF InsightsZacks' exclusive Fund Newsletter delivers actionable information, top news and analysis, as well as top-performing ETFs, straight to your inbox every week.Don’t miss out on this valuable resource. It’s free!Get it now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Consumer Staples Select Sector SPDR ETF (XLP): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks