“XLP is a defensive holding because consumers buy toilet paper, razors, bandages, and baby food regardless of the economic climate,” Goldsborough said. Utilities are another relatively stable, higher-yield sector that investors run to in difficult times.
The consumer staples ETF has an expense ratio of 0.18%.
“Investors seeking explosive growth are better suited looking elsewhere, as this ETF is chock-full of mature businesses offering relatively stable returns and a clear tilt toward large-cap names,” he added. “While investors shouldn’t expect much higher than mid-single-digit top-line growth from these mature firms, XLP does offer a decent dividend yield.”
Other consumer staples ETFs include:
- Focus Morningstar Consumer Defensive Index ETF (NYSEArca: FCD)
- iShares Dow Jones US Consumer Goods Sector Index Fund (NYSEArca: IYK)
- iShares S&P Global Consumer Staples (NYSEArca: KXI)
- Vanguard Consumer Staples Index Fund (NYSEArca: VDC)
Consumer Staples Select Sector SPDR
