XLP vs. PBJ: A Low-Cost Staples Giant Against a Concentrated Food-and-Beverage Specialist
Key Points
State Street Consumer Staples Select Sector SPDR ETF offers a significantly lower expense ratio and higher dividend yield than Invesco Food & Beverage ETF.
Invesco Food & Beverage ETF focuses on a narrow selection of holdings using a dynamic index strategy while the State Street fund provides broad coverage of the S&P 500 staples sector.
While both funds show similar volatility profiles with betas around 0.50, the State Street fund manages $14.6 billion in assets under management (AUM) compared to $94.1 million for the Invesco fund.
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State Street Consumer Staples Select Sector SPDR ETF (NYSEMKT:XLP) provides broad, low-cost exposure to large-cap staples, while Invesco Food & Beverage ETF (NYSEMKT:PBJ) offers a concentrated, higher-fee strategy focused on specific food-industry metrics.
Snapshot (cost & size)
| Metric | XLP | PBJ |
|---|---|---|
| Issuer | SPDR | Invesco |
| Expense ratio | 0.08% | 0.61% |
| 1-yr return (as of May 6, 2026) | 6.40% | 6.60% |
| Dividend yield | 2.60% | 1.50% |
| Beta | 0.49 | 0.50 |
| AUM | $14.6 billion | $94.1 million |
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 is a major differentiator, as XLP is significantly more affordable with an expense ratio 0.53 percentage points lower than its peer. Investors looking for income could find the State Street fund more attractive, as it provides a significantly higher distribution than the Invesco fund.
Performance & risk comparison
| Metric | XLP | PBJ |
|---|---|---|
| Max drawdown (5 yr) | (16.30%) | (15.80%) |
| Growth of $1,000 over 5 years (total return) | $1,360 | $1,272 |
What's inside
Invesco Food & Beverage ETF holds 31 stocks and focuses on the consumer defensive sector, which accounts for 81% of the portfolio. This fund, which was launched in 2005, tracks a dynamic index that selects companies based on merits like price momentum and earnings quality. Its largest positions include Archer-Daniels-Midland (NYSE:ADM) at 5.87%, Corteva (NYSE:CTVA) at 5.43%, and Mondelez International (NASDAQ:MDLZ) at 5.06%. The Invesco fund has a trailing-12-month dividend of $0.75 per share.
State Street Consumer Staples Select Sector SPDR ETF is more concentrated by sector, with 99% of its 36 holdings in consumer defensives. Launched in 1998, it tracks the Consumer Staples Select Sector Index, providing exposure to large-cap industry leaders in the S&P 500. Top holdings include Walmart (NASDAQ:WMT) at 11.93%, Costco Wholesale (NASDAQ:COST) at 9.55%, and Procter & Gamble (NYSE:PG) at 7.25%. This fund has paid $2.18 per share over the trailing 12 months.
For more guidance on ETF investing, check out the full guide at this link.
What this means for investors
Consumer staples surged back into favor in early 2026 as investors sought shelter from tech volatility and tariff uncertainty. Both XLP and PBJ sit within that defensive universe, but they are built very differently and serve quite different purposes.
XLP is the sector standard-bearer. It’s a straightforward, low-cost fund holding some of the largest U.S. consumer staples companies drawn from the S&P 500. Walmart, Costco, and Procter & Gamble anchor the portfolio. PBJ narrows its focus to food and beverage specifically, using a proprietary quantitative screen to select stocks based on fundamental factors rather than simply tracking an index.
The cost difference is difficult to overcome. PBJ charges nearly eight times what XLP does — a gap that demands consistent outperformance to justify, which the fund has not reliably delivered. PBJ also manages a fraction of XLP's assets, meaning liquidity and institutional backing are far thinner.
For most investors, XLP's simplicity, scale, and cost efficiency make it the more compelling choice. PBJ suits those making a deliberate, concentrated bet on food and beverage who believe the quantitative methodology can earn its premium.
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Sara Appino 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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