XLP Offers Better Value Than IYK in Consumer Staples ETFs

The State Street Consumer Staples Select Sector SPDR ETF (XLP) and iShares U.S. Consumer Staples ETF (IYK) are two popular consumer staples exchange-traded funds (ETFs). Both serve as defensive anchors for portfolios, focusing on companies that provide essential products like food, beverages, and household goods.

XLP has a lower expense ratio of 0.08%, making it more affordable than IYK's 0.37%. The State Street fund also offers a slightly higher payout, providing a modest yield advantage for income-focused investors. With an asset under management (AUM) of $13.9B, XLP is significantly larger than IYK's $1.6B AUM.

Both funds have similar dividend yields, with XLP offering 2.7% and IYK providing 2.6%. However, XLP has a higher one-year return of 8.4%, compared to IYK's 8.3%. The State Street fund also has a slightly higher growth of $1,000 over five years, at $1,340, compared to IYK's $1,331.

In terms of stock allocation, XLP concentrates heavily on the consumer defensive sector at 98%, with a slim 2% in consumer cyclicals. Its largest positions include Walmart (WMT) at 10.84%, Costco Wholesale (COST) at 9.15%, and Procter + Gamble (PG) at 7.75%. IYK, on the other hand, provides a wider net with 53 holdings, including 83% in consumer defensive, 13% in healthcare, and 3% in basic materials.