RSPS and XLP Offer Distinct Approaches to the Consumer Staples Sector. Which Is the Better Buy?
Key Points
RSPS carries a higher expense ratio than XLP but delivers a slightly better one-year total return.
Both ETFs are fully concentrated in the consumer defensive sector.
XLP is much larger and more liquid, while RSPS uses an equal-weight approach for broader exposure within consumer staples.
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The State Street Consumer Staples Select Sector SPDR ETF (NYSEMKT:XLP) and the Invesco S&P 500 Equal Weight Consumer Staples ETF (NYSEMKT:RSPS) both target the U.S. consumer staples sector, but they use different portfolio construction methods.
This comparison looks at cost, returns, risk, portfolio makeup, and trading characteristics to help investors decide which approach may align better with their goals.
Snapshot (cost & size)
| Metric | XLP | RSPS |
|---|---|---|
| Issuer | SPDR | Invesco |
| Expense ratio | 0.08% | 0.40% |
| 1-yr return (as of Feb. 14, 2026) | 9.94% | 11.75% |
| Dividend yield | 2.56% | 2.63% |
| Beta (5Y monthly) | 0.60 | 0.61 |
| AUM | $16 billion | $250 million |
Beta measures price volatility relative to the S&P 500. The 1-yr return represents total return over the trailing 12 months.
RSPS is more expensive than XLP on fees, with an expense ratio of 0.40% compared to XLP’s 0.08%. Both funds offer roughly the same dividend yield, so payout potential is comparable despite the cost difference.
Performance & risk comparison
| Metric | XLP | RSPS |
|---|---|---|
| Max drawdown (5 y) | -16.32% | -18.61% |
| Growth of $1,000 over 5 years | $1,363 | $1,095 |
What's inside
RSPS provides exposure to the same consumer defensive sector as XLP, but it assigns equal weight to each of its 36 holdings and rebalances quarterly. This means smaller companies have a similar influence to the sector giants. The fund has been operating for over 19 years, making it seasoned in the space.
In contrast, XLP tracks a market-cap-weighted index, so its largest holdings — Walmart, Costco Wholesale, and Procter & Gamble — dominate the portfolio. Both funds are fully dedicated to the consumer defensive sector, but XLP’s heavier tilt toward mega-cap companies results in greater liquidity and scale. RSPS, while smaller, provides more balanced exposure across the industry’s players.
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What this means for investors
While XLP and RSPS target the same sector and contain many of the same holdings, their different approaches may appeal to different investors.
RSPS’s equal-weighted strategy means that every stock, regardless of size, is given roughly the same allocation within the portfolio. XLP, on the other hand, allocates by market cap — so larger companies make up a larger proportion of the portfolio.
Both approaches can have benefits and drawbacks. An equal-weight approach can help limit single-stock risk, because each holding is on roughly the same footing. At the same time, though, that can limit its earnings, as high performers are given the same weight as stocks earning below-average returns.
The right choice for you will depend mostly on how much exposure you’re seeking to major players in the industry. XLP’s top three holdings account for a combined 28% of its portfolio, compared to 9.5% for RSPS.
If you’re looking for greater access to industry leaders, XLP’s market-cap-weighted approach may be a better fit. Those seeking to reduce single-stock risk and invest in all holdings at roughly equal weights, however, might prefer RSPS.
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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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