VDC and RSPS Take Different Routes to the Same Sector

The Vanguard Consumer Staples ETF (NYSEMKT:VDC) offers lower costs and market-cap-weighted stability, while the Invesco S&P 500 Equal Weight Consumer Staples ETF (NYSEMKT:RSPS) may appeal to those seeking broader diversification across smaller sector players.

Consumer staples provide a defensive anchor for many portfolios, focusing on companies that sell essential goods like food, beverages, and household products. While both funds target this stable sector, they differ fundamentally in how they weight their holdings, which leads to distinct performance and risk profiles for long-term investors.

Snapshot (cost & size)

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.

Cost-conscious investors might prefer the Vanguard fund, which carries a 0.09% expense ratio compared to 0.4% for the Invesco fund. However, the Invesco fund currently offers a higher payout, with a 2.8% trailing-12-month dividend yield.

Performance & risk comparison

What's inside

The Invesco S&P 500 Equal Weight Consumer Staples ETF (NYSEMKT:RSPS) utilizes an equal-weight strategy, meaning it allocates roughly the same amount to each of its 37 holdings during its quarterly rebalancing. This approach reduces the influence of industry giants and increases exposure to mid-sized firms within the sector. The portfolio consists of 97% consumer defensive stocks and 3% consumer cyclical stocks. Its largest positions include Casey's General Stores (NASDAQ:CASY) at 3.29%, Tyson Foods (NYSE:TSN) at 3.28%, and Archer-Daniels-Midland (NYSE:ADM) at 3.21%. Launched in 2006, the fund has paid $0.84 per share over the trailing 12 months.

In contrast, the Vanguard Consumer Staples ETF (NYSEMKT:VDC) follows a market-cap-weighted approach, resulting in a more concentrated portfolio that currently holds 103 securities. Because it weights by size, its performance is heavily influenced by the sector largest corporations. Its top holdings include Walmart (NASDAQ:WMT) at 15.67%, Costco Wholesale (NASDAQ:COST) at 12.40%, and Procter & Gamble (NYSE:PG) at 9.22%. This fund allocates 98% to consumer defensive and 2% to consumer cyclical companies. Launched in 2004, the Vanguard fund has a trailing-12-month dividend of $4.82 per share.

What does this mean for investors

Both funds give you consumer staples exposure, but the weighting scheme drives almost everything else about how they behave. Which one fits depends on what you want out of the slot. VDC follows market-cap weighting across 103 holdings, with Walmart, Costco, and P&G accounting for roughly 37% of the fund. The 0.09% expense ratio is hard to beat, and the structure is essentially a cheap way to mirror how the staples sector is actually capitalized. The trade-off is concentration — a handful of mega-caps drive most of the performance, so the fund moves with them. This is the cleaner fit for cost-conscious investors who want a defensive sleeve and are comfortable letting the biggest names lead. RSPS equal-weights 37 holdings and rebalances quarterly, giving meaningful exposure to mid-sized names like Casey's General Stores, Tyson, and Archer-Daniels-Midland. The 0.40% expense ratio is more than four times higher and the holdings list is shorter, but no single position dominates and the trailing yield runs higher at 2.8%. This makes more sense for investors who want a more even distribution across the sector or who value the forced rebalancing dynamic. Neither is the "better" fund in a vacuum. The real question is whether you view consumer staples as a place to lean on dominant brands like Walmart and P&G, or as a place to spread bets across the whole sector. VDC answers the first; RSPS answers the second.

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Seena Hassouna has positions in Costco Wholesale. The Motley Fool has positions in and recommends Costco Wholesale and Walmart. The Motley Fool recommends Casey's General Stores. The Motley Fool has a disclosure policy.