VDC Offers Broader Consumer Staples Exposure Than XLP, But Is It Really the Better Buy?
Key Points
XLP carries a slightly higher yield and a marginally higher one-year return than VDC.
VDC holds nearly three times as many stocks, offering broader exposure within consumer staples.
Both ETFs show similar risk profiles and top holdings.
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The State Street Consumer Staples Select Sector SPDR ETF (NYSEMKT:XLP) and the Vanguard Consumer Staples ETF (NYSEMKT:VDC) both aim to capture the performance of companies in the U.S. consumer staples sector, with each fund providing exposure to iconic brands in food, retail, and household products.
This comparison explores how their costs, performance, risk, and portfolio composition stack up for investors seeking defensive sector allocations.
Snapshot (cost & size)
| Metric | XLP | VDC |
|---|---|---|
| Issuer | SPDR | Vanguard |
| Expense ratio | 0.08% | 0.09% |
| 1-yr return (as of Feb. 12, 2026) | 10.69% | 9.41% |
| Dividend yield | 2.56% | 2.10% |
| AUM | $16 billion | $9 billion |
| Beta (5Y monthly) | 0.60 | 0.64 |
Beta measures price volatility relative to the S&P 500. The 1-yr return represents total return over the trailing 12 months.
Both funds are competitively priced, with XLP having a slight edge over VDC on fees due to its lower expense ratio. XLP also stands out for its higher dividend yield, which could appeal to income-focused investors.
Performance & risk comparison
| Metric | XLP | VDC |
|---|---|---|
| Max drawdown (5 y) | -16.32% | -16.56% |
| Growth of $1,000 over 5 years | $1,360 | $1,406 |
What's inside
VDC holds 104 stocks, providing diversified exposure to the consumer defensive sector. Its largest positions are Walmart, Costco Wholesale, and Procter & Gamble, giving it a slightly broader portfolio than some sector peers.
XLP, by contrast, is concentrated in just 36 companies, all within the consumer defensive sector. Its top holdings match VDC’s, but at smaller allocations than its competitor.
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What this means for investors
VDC provides a more diversified approach to consumer staples, with nearly three times as many holdings as XLP. However, it also leans more heavily on household names.
While the two funds share the same top three holdings, those stocks make up 36.8% of VDC’s portfolio compared to 28.2% for XLP. This can make VDC more vulnerable to price swings — both positive and negative — if those particular stocks thrive or falter.
That said, XPL’s much smaller portfolio could also increase its risk in other ways. If even a few of its stocks struggle to weather a downturn, it’s more likely to take a toll on its overall earnings compared to VDC.
Over the last five years, the two funds have experienced remarkably similar performance. With nearly identical max drawdowns, they’re on almost equal footing in terms of past volatility. While XLP has earned marginally higher one-year total returns, VDC has edged ahead in five-year growth.
For many investors, the difference in diversification could be the deciding factor. Those looking for greater exposure to more consumer staples stocks may prefer VDC’s larger portfolio, while XLP offers an advantage for those seeking a more targeted approach.
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Katie Brockman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale and Walmart. The Motley Fool has a disclosure policy.
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