RSPS and XLP Offer Distinct Approaches to the Consumer Staples Sector. Which Is the Better Buy?

Core Insights - The State Street Consumer Staples Select Sector SPDR ETF (XLP) and the Invesco S&P 500 Equal Weight Consumer Staples ETF (RSPS) target the U.S. consumer staples sector but utilize different portfolio construction methods [1] Cost & Size Comparison - XLP has a lower expense ratio of 0.08% compared to RSPS's 0.40% - As of February 14, 2026, XLP's 1-year return is 9.94%, while RSPS's is higher at 11.75% - Both funds have similar dividend yields, with XLP at 2.56% and RSPS at 2.63% - XLP has an Assets Under Management (AUM) of $16 billion, significantly larger than RSPS's $250 million [2][3] Performance & Risk Analysis - Over a 5-year period, XLP experienced a maximum drawdown of -16.32%, while RSPS had a higher drawdown of -18.61% - An investment of $1,000 in XLP would grow to $1,363 over 5 years, compared to $1,095 for RSPS [4] Portfolio Composition - RSPS employs an equal-weight strategy across its 36 holdings, rebalancing quarterly, which allows smaller companies to have a similar influence as larger ones - XLP follows a market-cap-weighted index, leading to a portfolio dominated by larger companies like Walmart, Costco Wholesale, and Procter & Gamble [5][6] Implications for Investors - The different strategies of XLP and RSPS may appeal to various investor preferences - RSPS's equal-weighted approach limits single-stock risk by giving each holding roughly the same allocation, while XLP's market-cap weighting results in larger companies having a greater impact on performance [7][8]