Better Consumer Staples ETF: Vanguard's VDC vs. State Street's XLP
State Street offers a higher yield and lower costs, but Vanguard's broader portfolio of 103 holdings delivered stronger five-year returns.
In comparing the State Street Consumer Staples Select Sector SPDR ETF (XLP) and Vanguard Consumer Staples ETF (VDC), two defensive giants emerge with nearly identical costs but distinct strategies in portfolio concentration and yield. Both funds function as defensive assets for a portfolio, concentrating on companies that sell essential items such as food, beverages, and household goods. These recession-resistant stocks typically behave differently than the broader market during times of market turbulence.
For investors looking to reduce volatility compared to the broader S&P 500, these ETFs offer a targeted approach to investing in the companies that produce everyday products. The funds' portfolios consist of companies that supply essential goods. Beta, a measure of price volatility relative to the S&P 500, is determined from monthly returns over the available fund history, up to five years.
The 1-year return represents the total return over the trailing 12 months, while the dividend yield is based on the trailing-12-month distribution yield.
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