① Overview
XLP (Consumer Staples Select Sector SPDR Fund) is the flagship US consumer staples ETF, which State Street (SSGA) began managing in December 1998. It directly replicates the 'Consumer Staples Select Sector Index,' which selects only food, beverage, tobacco, household products, and consumer staples distribution companies from within the S&P 500. With a 0.08% expense ratio, roughly $15.26 billion in assets under management, and 36 holdings, it is a large, conservative ETF. Put simply, it is a bundle of companies that make daily necessities people keep buying whether the economy is good or bad. (Source: SSGA official fund page, accessed 2026-06-01 / data as of 2026-05-19~20)
② Top 10 Holdings (as of 2026-05-19)
| Rank | Holding | Weight |
|---|---|---|
| 1 | Walmart | 12.13% |
| 2 | Costco | 10.02% |
| 3 | Procter & Gamble (P&G) | 6.77% |
| 4 | Coca-Cola | 6.54% |
| 5 | Philip Morris Intl | 6.15% |
| 6 | Altria | 4.87% |
| 7 | Mondelez | 4.84% |
| 8 | Colgate-Palmolive | 4.39% |
| 9 | PepsiCo | 4.24% |
| 10 | Monster Beverage | 3.94% |
The top 10 holdings sum to 63.9%, and the top 2 (Walmart + Costco) alone make up 22.1%. By industry, the breakdown is consumer staples distribution & retail 34.45%, beverages 19.36%, food 16.38%, household products 15.43%, tobacco 11.06%, and personal care 3.32%. (Source: SSGA, accessed 2026-06-01)
③ Cost, Tracking Gap & Tax
| Item | Value |
|---|---|
| Expense ratio (Gross) | 0.08% |
| NAV premium/discount | +0.02% (2026-05-19) |
| 30-day median bid-ask spread | 0.01% |
| 30-day SEC yield | 2.55% |
An expense ratio of 0.08% comes to about 800 won on a 1 million won annual investment — the lowest tier in its category. With a NAV premium/discount of 0.02% and a bid-ask spread of 0.01%, trading costs are effectively negligible too. That said, a Korean investor should think in terms of total cost = expense ratio + tracking gap + tax. Because this is a US-listed ETF, filing a W-8BEN subjects dividends to 15% withholding (keenly felt given the yield is in the 2.5% range), and capital gains are subject to a 22% transfer income tax after an annual deduction of 2.5 million won. (Source: SSGA, accessed 2026-06-01 / tax rates: Korea-US tax treaty and the domestic Income Tax Act)
④ 5-Year Returns (NAV, pre-tax, as of 2026-04-30)
| Period | Annualized Return |
|---|---|
| 1 year | 5.80% |
| 3 years | 5.70% |
| 5 years | 6.67% |
| 10 years | 7.72% |
| Since inception | 6.84% |
XLP's 5-year CAGR of 6.67% is less than half that of tech/semiconductor ETFs over the same period. The conventional offset is that its volatility is lower — but there is a point to examine here (see ⑤). Morningstar assigned XLP an overall 4-star rating (Consumer Defensive, 2026-04-30). (Source: SSGA·Morningstar, accessed 2026-06-01. Because our own Supabase DB holds price series only since the start of 2026, the long-term CAGR uses figures disclosed by the issuer)
⑤ Risks
Concentration risk. Contrary to the impression of '36-holding diversification,' the top 2 holdings — Walmart and Costco — account for 22.1%, and the top 10 for 63.9%. Moreover, both are large retail stocks, so 34.45% of the fund is tied to a single industry, 'consumer staples distribution & retail.' In effect, it is less a basket of daily necessities than a bet on 'big-box discount stores + beverages + tobacco.'
FX and regulatory risk. For a Korean investor, this is a dollar asset, so KRW/USD exchange-rate moves add directly to returns. The 11% tobacco weight can also become a weak point if ESG funds exclude it or regulation tightens.
⚠️ Counter-consensus — "defensives fall less than the market" is only half true. Calculating the 2026 year-start to 6/1 window with our own data, XLP's maximum drawdown (MDD) was -9.70%, actually deeper than the S&P 500's (SPY) -8.89%, and its annualized volatility was also higher at 14.8% vs 13.2%. Over the same period, its return lagged at XLP +7.31% vs SPY +11.03%. 'Defense' is a story about long-term, bear-market 'averages' — not a guarantee of smaller losses in every window. During the consumer-staples-specific correction in February–March 2026, XLP swung more than the market. (Source: our own Supabase etf_prices/yfinance, 2026-01-02~2026-06-01, calculated 2026-06-01)
⑥ Comparison of 3 Similar ETFs
| Ticker | Manager | Expense Ratio | One-line difference |
|---|---|---|---|
| XLP | SSGA | 0.08% | 36 consumer staples in the S&P 500, large-cap concentrated |
| VDC | Vanguard | 0.10% | Broader — all US consumer staples (incl. small/mid-cap) |
| FSTA | Fidelity | 0.08% | Almost identical composition to VDC, marginally lower cost |
| KXI | iShares | 0.46% | Global (US 60%, UK, Japan, Switzerland, etc.) diversification |
XLP is a tool for betting precisely on 'S&P 500 large-cap consumer staples'; for broader US exposure, consider VDC·FSTA, and for global diversification, KXI (6x the cost). None of the three is the 'right answer' — it is a trade-off among concentration, country diversification, and cost. (Source: SSGA·Vanguard·Fidelity·iShares disclosures and ETF comparison materials, accessed 2026-06-01)
ETF Insight Disclaimer — This analysis is not a recommendation of any security; it is run on the principle of disclosing not just outcomes but the 'process' of judgment, and "disclosing even when wrong." All figures specify their source and access date, and short-term returns under one month are treated as noise and not emphasized. Investment decisions and the responsibility for them rest with the investor.