XLP vs RSPS: Which Consumer Staples ETF Wins on Returns and Cost

Investors comparing the State Street Consumer Staples Select Sector SPDR ETF with the Invesco S&P 500 Equal Weight Consumer Staples ETF have to pick between concentration and diversification. The State Street fund, ticker XLP, holds 35 stocks weighted by market capitalization. Walmart Inc. gets a 10.86% slice. Costco Wholesale Corp. gets 9%. Coca-Cola Co. sits at 7.17%. The Invesco fund, RSPS, holds the same 35 names but caps each at roughly 3.5%. No single stock dominates.

Over the last five years, the cap-weight approach has delivered meaningfully better returns. A $1,000 investment in XLP five years ago would have grown to roughly $1,580. The same amount in RSPS would have returned about $1,400. The gap comes from owning more of the sector's biggest, most efficient operators and less of the laggards.

XLP charges 0.08% in annual expenses against RSPS's 0.4%. Its trailing distribution yield is 2.6%, just below RSPS's 2.8%. The Invesco fund launched in 2006, eight years after XLP hit the market in 1998.

RSPS spreads exposure across names like Target Corp at 3.49%, General Mills Inc at 3.27%, and Dollar Tree Inc at 0.38%. That structure prevents any single company from steering the fund. It also means owning more underperformers. The trade-off is real.

Walmart, XLP's top holding, scores a 53 out of 100 on AlphaScala's scale, a Mixed label. Its stock sat at $103.70, down 0.13% on the session. Coca-Cola, another top XLP name, scores 66 (Moderate). Both sit in Consumer Staples, a defensive corner that tends to hold up when growth stocks wobble.

For most investors building defensive exposure, the straightforward pick is XLP. It costs less, has a longer track record, and its cap-weight structure has captured the sector's winners more effectively. RSPS has a narrower use case: an investor specifically wary of mega-cap concentration, or one who wants a satellite holding alongside a core position rather than a replacement for it.

Before buying either fund, investors should check the full market analysis and stock market analysis pages for updated data on the underlying holdings.