The Vanguard Consumer Staples ETF (VDC) and the State Street Consumer Staples Select Sector SPDR ETF (XLP) both provide U.S. consumer staples exposure. XLP has a lower expense ratio and higher dividend yield, while VDC outperformed XLP in five-year total return. XLP holds fewer stocks with a focus on consumer defensive names, while VDC has a slight cyclical tilt. Both funds track the consumer staples sector, offering defensive exposure through household names. XLP is slightly cheaper and may appeal to income-focused investors, while VDC offers broader diversification within the staples sector.

XLP holds 36 stocks with 100% in consumer defensive companies, led by Walmart, Costco Wholesale, and Procter & Gamble. VDC has 105 holdings with a 98% consumer defensive sector mix and top positions in Walmart, Costco Wholesale, and Procter & Gamble. XLP has a lower expense ratio and higher dividend yield, making it less volatile than VDC. VDC’s broader portfolio could offer more diversification within the sector. When choosing between the two funds, consider the broader scope of VDC versus the lower fees and higher yield of XLP.

Read more at Nasdaq: XLP vs. VDC: Are Lower Fees Better Than Broader Exposure?