State Street or iShares: Which Consumer Staples ETF Offers Better Value?
Key Points
The State Street fund maintains a lower expense ratio than the iShares alternative.
iShares U.S. Consumer Staples ETF provides broader sector exposure by including healthcare and basic materials holdings.
Both funds have delivered comparable total returns over the last five years while maintaining identical trailing yields.
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The consumer staples sector is often viewed as a "safe haven" during periods of market turbulence because it includes companies that provide essential products like groceries and cleaning supplies. This comparison examines two of the most popular vehicles for this strategy, weighing the $13.6 billion in assets under management (AUM) of the State Street Consumer Staples Select Sector SPDR ETF (NYSEMKT:XLP) against the $1.3 billion AUM and broader industry scope of the iShares U.S. Consumer Staples ETF (NYSEMKT:IYK). Both ETFs offer a way to dial down volatility in a diversified portfolio.
Snapshot (cost & size)
| Metric | IYK | XLP |
|---|---|---|
| Issuer | iShares | SPDR |
| Share price | $72.66 (as of 6/30/2026) | $83.07 (as of 6/30/2026) |
| Expense ratio | 0.38% | 0.08% |
| 1-yr return (as of 6/30/2026) | 5.9% | 5.5% |
| Dividend yield | 2.60% | 2.60% |
| Beta | 0.5 | 0.5 |
| AUM | $1.3 billion | $13.7 billion |
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.
A 0.30 percentage point difference in expense ratios might seem small at first glance, but it significantly impacts long-term capital accumulation when compounded over decades. The lower fee structure of the State Street fund allows more of the underlying investment gains to remain in the investor's account over time.
Performance & risk comparison
| Metric | IYK | XLP |
|---|---|---|
| Max drawdown (5 yr) | (15.00%) | (16.30%) |
| Growth of $1,000 over 5 years (total return) | $1,338 | $1,359 |
What's inside
The State Street Consumer Staples Select Sector SPDR ETF concentrates almost exclusively on the consumer defensive sector at 99% of the portfolio, providing a pure-play experience for investors. It currently holds 34 stocks, which results in a relatively concentrated bet on the largest domestic staples companies. Its top holdings include Walmart at 10.4%, Costco Wholesale at 8.9%, and Procter & Gamble at 7.4%. This fund was launched in 1998 and tracks a selection of S&P 500 components. The ETF has paid $2.20 per share over the trailing 12 months, which on its recent ~$83.1 share price works out to a 2.60% yield. This focus on the largest blue chip names typically leads to high liquidity for traders.
The iShares U.S. Consumer Staples ETF provides exposure to 53 holdings and reaches beyond pure staples to include related defensive industries. While consumer defensive stocks comprise 85% of the fund, the portfolio also includes 11% in healthcare and 3% in basic materials. Its largest positions include Procter & Gamble at 13.32%, Coca-Cola at 12.3%, and Philip Morris International at 10.8%. This broader diversification may appeal to those seeking wider defensive coverage. The fund was launched in 2000. iShares U.S. Consumer Staples ETF has paid $1.90 per share over the trailing 12 months, which on its recent ~$72.7 share price works out to a 2.60% yield.
For more guidance on ETF investing, check out the full guide at this link.
What it means for investors
After the tech sector’s massive multiyear run and questions about interest rates and artificial intelligence spending, it makes sense to devote some investment dollars to safer, less exciting corners of the stock market. Both of these ETFs are good options for investors seeking consumer staples exposure, but have different strengths and weaknesses.
The iShares U.S. Consumer Staples ETF provides a broader basket including healthcare names, but despite its slightly higher one-year return, it charges a higher expense ratio, which could diminish returns over time. The State Street Consumer Staples Select Sector SPDR ETF offers much lower costs and higher liquidity, providing greater value overall, and while it is more concentrated within the consumer defensive sector, it manages about 10 times the assets of the iShares fund, giving it more liquidity.
The better pick for investors will likely come down to their tolerance for fees, as well as what else they already hold in their portfolio. The iShares funds’ broader holdings could appeal to those who are looking for broader exposure to defensive stocks, while the State Street ETF may be better suited as a more concentrated holding within a larger portfolio.
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Sarah Sidlow has positions in Costco Wholesale. The Motley Fool has positions in and recommends Costco Wholesale and Walmart. The Motley Fool recommends Philip Morris International. The Motley Fool has a disclosure policy.
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