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Should You Invest in the Consumer Staples Select Sector SPDR ETF (XLP)?
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If you're interested in broad exposure to the Consumer Staples - Broad segment of the equity market, look no further than the Consumer Staples Select Sector SPDR ETF (XLP - Free Report) , a passively managed exchange traded fund launched on 12/16/1998.
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.
Sector ETFs also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. Consumer Staples - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 11, placing it in bottom 31%.
Index Details
The fund is sponsored by State Street Global Advisors. It has amassed assets over $15.44 billion, making it the largest ETF attempting to match the performance of the Consumer Staples - Broad segment of the equity market. XLP seeks to match the performance of the Consumer Staples Select Sector Index before fees and expenses.
The Consumer Staples Select Sector Index seeks to provide an effective representation of the consumer staples sector of the S&P 500 Index.
Costs
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.10%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 2.39%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Consumer Staples sector--about 100% of the portfolio.
Looking at individual holdings, Procter & Gamble Company (PG - Free Report) accounts for about 15.80% of total assets, followed by Pepsico Inc. (PEP - Free Report) and Coca-Cola Company (KO - Free Report) .
The top 10 holdings account for about 70.96% of total assets under management.
Performance and Risk
So far this year, XLP has lost about -4.66%, and it's up approximately 13.15% in the last one year (as of 03/17/2022). During this past 52-week period, the fund has traded between $66.15 and $77.62.
The ETF has a beta of 0.65 and standard deviation of 18.60% for the trailing three-year period, making it a medium risk choice in the space. With about 34 holdings, it has more concentrated exposure than peers.
Alternatives
Consumer Staples Select Sector SPDR ETF sports a Zacks ETF Rank of 4 (Sell), which is based on expected asset class return, expense ratio, and momentum, among other factors. XLP, then, is not the best option for investors seeking exposure to the Consumer Staples ETFs segment of the market. However, there are better ETFs in the space to consider.
IShares Global Consumer Staples ETF (KXI - Free Report) tracks S&P Global 1200 Consumer Staples Sector Index and the Vanguard Consumer Staples ETF (VDC - Free Report) tracks MSCI US Investable Market Consumer Staples 25/50 Index. IShares Global Consumer Staples ETF has $996.60 million in assets, Vanguard Consumer Staples ETF has $6.66 billion. KXI has an expense ratio of 0.43% and VDC charges 0.10%.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Should You Invest in the Consumer Staples Select Sector SPDR ETF (XLP)?
If you're interested in broad exposure to the Consumer Staples - Broad segment of the equity market, look no further than the Consumer Staples Select Sector SPDR ETF (XLP - Free Report) , a passively managed exchange traded fund launched on 12/16/1998.
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.
Sector ETFs also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. Consumer Staples - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 11, placing it in bottom 31%.
Index Details
The fund is sponsored by State Street Global Advisors. It has amassed assets over $15.44 billion, making it the largest ETF attempting to match the performance of the Consumer Staples - Broad segment of the equity market. XLP seeks to match the performance of the Consumer Staples Select Sector Index before fees and expenses.
The Consumer Staples Select Sector Index seeks to provide an effective representation of the consumer staples sector of the S&P 500 Index.
Costs
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.10%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 2.39%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Consumer Staples sector--about 100% of the portfolio.
Looking at individual holdings, Procter & Gamble Company (PG - Free Report) accounts for about 15.80% of total assets, followed by Pepsico Inc. (PEP - Free Report) and Coca-Cola Company (KO - Free Report) .
The top 10 holdings account for about 70.96% of total assets under management.
Performance and Risk
So far this year, XLP has lost about -4.66%, and it's up approximately 13.15% in the last one year (as of 03/17/2022). During this past 52-week period, the fund has traded between $66.15 and $77.62.
The ETF has a beta of 0.65 and standard deviation of 18.60% for the trailing three-year period, making it a medium risk choice in the space. With about 34 holdings, it has more concentrated exposure than peers.
Alternatives
Consumer Staples Select Sector SPDR ETF sports a Zacks ETF Rank of 4 (Sell), which is based on expected asset class return, expense ratio, and momentum, among other factors. XLP, then, is not the best option for investors seeking exposure to the Consumer Staples ETFs segment of the market. However, there are better ETFs in the space to consider.
IShares Global Consumer Staples ETF (KXI - Free Report) tracks S&P Global 1200 Consumer Staples Sector Index and the Vanguard Consumer Staples ETF (VDC - Free Report) tracks MSCI US Investable Market Consumer Staples 25/50 Index. IShares Global Consumer Staples ETF has $996.60 million in assets, Vanguard Consumer Staples ETF has $6.66 billion. KXI has an expense ratio of 0.43% and VDC charges 0.10%.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.