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XLP charges a much lower expense ratio and manages over 10 times the assets of IYK
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Both funds yield 2.7% and focus on U.S. consumer staples, but XLP is more concentrated and pure-play in sector exposure
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IYK has slightly outperformed XLP over the past year and five years, with a shallower max drawdown
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The State Street Consumer Staples Select Sector SPDR ETF (NYSEMKT:XLP) stands out for its much lower fees, deeper sector focus, and far greater assets under management than the iShares US Consumer Staples ETF (NYSEMKT:IYK), while IYK has delivered modestly stronger recent returns and shallower max drawdown.
Both XLP and IYK seek to provide investors with exposure to U.S. consumer staples stocks, a sector known for defensive qualities and steady dividends. This comparison looks at cost, returns, risk, holdings, and structure to help investors understand the key differences between two of the most prominent choices in the space.
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Metric
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IYK
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XLP
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Issuer
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IShares
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SPDR
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Expense ratio
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0.38%
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0.08%
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1-yr return (as of 2025-12-26)
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1.7%
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(1.8%)
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Dividend yield
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2.7%
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2.7%
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AUM
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$1.2 billion
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$14.7 billion
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The 1-yr return represents total return over the trailing 12 months.
XLP is significantly more affordable at 0.08% in annual expenses, while IYK charges 0.38%. Both funds currently offer a 2.7% dividend yield, so cost savings may be the deciding factor for fee-sensitive investors.
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Metric
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IYK
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XLP
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Max drawdown (5 y)
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(15.04%)
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(16.31%)
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Growth of $1,000 over 5 years
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$1,178
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$1,163
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XLP holds 36 stocks and delivers pure-play exposure to U.S. consumer defensive companies, with all assets in that sector. Its largest positions as of late December 2025 are Walmart (NASDAQ:WMT), Costco (NASDAQ:COST), and Procter & Gamble (NYSE:PG), together accounting for over a quarter of the portfolio. The fund has a long track record at 27.0 years, and its focus on the Consumer Staples Select Sector Index means holdings are concentrated in household products, food, beverage, and retail giants.
IYK, by contrast, holds 54 stocks and has a slightly broader sector allocation: 85% in consumer defensive, 12% in healthcare, and 2% in basic materials. Its top holdings are Procter & Gamble, Coca-Cola (NYSE:KO), and Philip Morris International(NYSE:PM), providing more exposure to tobacco and beverage companies. IYK’s broader scope may appeal to those seeking a bit more diversification within consumer-related industries.
For more guidance on ETF investing, check out the full guide at this link.
Despite a much larger expense ratio, returns investors recorded from the iShares US Consumer Staples ETF and the State Street Consumer Staples Select Sector SPDR ETF have been nearly identical. Over the past five years, investors who bet $1,000 in IYK and collected all the dividends their shares from IYK recorded a total return of $298. Folks who bet $1,000 on XLP have seen their investment grow by $314 over the same time frame.
Returns from IYK accelerated in late 2020 through early 2021 as compared to XLP. Investors who bet $1,000 on IYK 10 years ago and collected all their dividends have seen their investment grow by $1,321. Folks who invested in XLP saw a total return of just $1,010 over the same time frame.
The iShares US Consumer Staples ETF and the State Street Consumer Staples Select Sector SPDR ETF both focus on the consumer goods space with an important difference. The iShares US Consumer Staples ETF tracks the Russell 1000 Consumer Staples Index, while the State Street Consumer Staples Select Sector SPDR ETF tracks the Consumer Staples Select Sector Index, which is limited to stocks in the S&P 500 index.
ETF: Exchange-traded fund that holds a basket of securities and trades like a stock.
Expense ratio: Annual fund operating costs expressed as a percentage of the fund’s average assets.
Dividend yield: Annual dividends per share divided by the current share price, shown as a percentage.
Beta: Measure of an investment’s volatility compared with the overall market, typically the S&P 500.
AUM (Assets under management): Total market value of all assets a fund or manager oversees.
Max drawdown: Largest peak-to-trough decline in value over a specific period, showing worst historical loss.
Total return: Investment performance including price changes plus all dividends and distributions, assuming reinvestment.
Consumer staples sector: Companies selling essential everyday products like food, beverages, and household goods.
Defensive sector: Industry group that tends to be less sensitive to economic cycles, often providing steadier returns.
Sector exposure: Portion of a fund’s assets invested in a particular industry or group of related industries.
Pure-play exposure: Investment focused almost entirely on a single sector or business theme, with minimal diversification elsewhere.
Index: Benchmark portfolio of securities used to measure market or sector performance and guide index-tracking funds.
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Cory Renauer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale and Walmart. The Motley Fool recommends Philip Morris International. The Motley Fool has a disclosure policy.
The XLP ETF Offers Lower Fees and a Larger Size Than the IYK ETF was originally published by The Motley Fool
