Consumer spending has been a strong point in the economy, but recent headwinds are building. The consumer discretionary sector has felt pressure due to recessionary concerns on top of pricing inflation from potential tariffs. On the other hand, the consumer staples sector has remained resilient. While often thought of as “less exciting,” this defensive sector has shown some strength in 2025 as consumers buckle under uncertainty. The largest of the consumer staples sector ETFs, the Consumer Staples Select Sector SPDR Fund (XLP ), up 3.6% YTD, has outperformed the Consumer Discretionary Select Sector SPDR Fund (XLY ), which has been down 12.5% YTD.
Broader Retail Trends Drive the Consumer Staples Sector
Consumer staples is “defensive,” which means that consumers will continue to spend money on staples like household products, food, beverages, tobacco, and personal care items, even when there is less money in their wallet. Because of this, these products — particularly those with stronger brand names and loyalty programs — tend to hold more pricing power. If they tariffs affect them, they can pass some of those costs onto the consumer.
Additionally, consumer staples aren’t immune to growth opportunities. While e-commerce is typically known to benefit companies in the consumer discretionary or technology space, retailers like Walmart (WMT) and Costco (COST) have been growing their e-commerce operations. Certain e-commerce companies like Maplebear (CART), which is also known as Instacart, are considered to be consumer staples stocks.
Overall, the largest consumer staples stocks have mostly performed well year-to-date, amid a struggling stock market. There has been some weakness in consumer staples distribution (i.e., discount retailers), which typically carry a mix of discretionary and staples products. But other areas, like food, beverages, tobacco, and household products, remain strong.
Consumer Staples ETFs
Investors have a wide range of consumer staples ETFs to choose from.
XLP
The Consumer Staples Select Sector SPDR Fund (XLP ) is the oldest and largest of the group, with $16.7 billion in assets. It is also tied for the cheapest expense ratio, at only 8 basis points. Among some of its larger peers, the ETF has relatively few holdings (just over 50). The ETF, however, is well-diversified by industry. Close to 30% of its weight is in consumer staples distribution; about 20% each in household products, beverage, and food products. Top holdings include: Procter & Gamble (PG), Costco Wholesale (COST), and Walmart (WMT).
VDC
While every constituent of XLP is also in Vanguard Consumer Staples ETF (VDC ), VDC includes around 50 additional mid-cap and small-cap stocks. But weightings for these additional holdings are small, with the highest weights at only 0.6% including US Foods Holdings (USFD) and Sprouts Farmers Market (SFM). VDC is also a low-cost option at only 9 basis points.
IYK
The iShares U.S. Consumer Staples ETF (IYK ) differs from both XLP and VDC with a few key names. Several big names like Costco, Walmart, and Target (TGT) are excluded from this ETF. The ETF includes some unique names that balance between the staples and healthcare space, like McKesson Corp (MCK) and CVS Health (CVS). iShares also offers the iShares Global Consumer Staples ETF (KXI ) which takes a global view of the consumer staples sector. Interestingly, KXI uses an S&P index, while IYK uses a Russell index. KXI does include Costco, Walmart, and Target. Notable names among its top holdings also include Nestle SA (NESN SW), Unilever (ULVR LN), and L’Oreal (OR FP).
FSTA
The Fidelity MSCI Consumer Staples Index ETF (FSTA ) shares almost every constituent with VDC, as they both track slightly different (but very similar) MSCI indexes. VDC has a slightly higher allocation to its top five holdings (52.2% vs. 47.2%).
FXG
The First Trust Consumer Staples AlphaDEX Fund (FXG ) appears very differently from its market-cap weighted peers. This ETF uses a ranking methodology based on growth and value factors. This ETF is missing most of the big staples stocks mentioned earlier, like Procter & Gamble, Costco, Walmart, and Coca-Cola (KO). Instead, top holdings include CVS Health, Pilgrim’s Pride (PPC), and Molson Coors Beverage (TAP). It has a significantly higher exposure to food products than its peers.
Invesco's Consumer Staples ETFs
Invesco has three broad consumer staples ETFs including:
- The Invesco S&P 500 Equal Weight Consumer Staples ETF (RSPS ): RSPS provides diversified exposure to the U.S. consumer staples sector. On an equal-weight basis, the sector still outperformed the consumer discretionary sector +2.0% vs. -5.5%.
- The Invesco Dorsey Wright Consumer Staples Momentum ETF (PSL ): PSL selects stocks based on relative strength (momentum) — top holdings include BJ’s Wholesale Club (BJ), Church & Dwight (CHD), and Stride (LRN).
- The Invesco S&P SmallCap Consumer Staples ETF (PSCC ): PSCC focuses on small-caps, which is an area not included in the largest consumer staples ETF, XLP. Its top holdings include Cal-Maine Foods (CALM), WD-40 Co (WDFC), and Simply Good Foods (SMPL).
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