Does Costco belong in consumer staples?

Costco is classified in the Consumer Staples sector by GICS (the S&P/MSCI classification system) alongside Walmart and Target — the 'Food & Staples Retailing' sub-industry. This is sometimes surprising to investors who think of Costco more as a retailer. The rationale is that Costco primarily sells food, household products, and consumer staples — items that qualify as essential consumer goods. Costco's classification means XLP and VDC both include Costco as a significant holding, adding retail exposure alongside pure brand companies like P&G and Coca-Cola.

Do XLP and VDC pay dividends?

Yes — both XLP and VDC distribute quarterly dividends from their constituent consumer staples companies. Consumer staples companies (P&G, Coca-Cola, PepsiCo, Altria, Philip Morris) are among the most consistent dividend payers in the US market. XLP and VDC typically yield 2.5-3% annually — providing meaningful income alongside their defensive growth characteristics. The dividend income is one reason investors use consumer staples ETFs as portfolio ballast alongside growth-oriented positions.

How do XLP and VDC perform in recessions?

Consumer staples ETFs historically outperform the S&P 500 in recessions because essential product demand remains stable while cyclical sectors fall sharply. In the 2008-2009 financial crisis, XLP fell approximately 15-20% vs the S&P 500's 50%+ decline — demonstrating meaningful defensive outperformance. In the 2020 COVID crash, XLP similarly fell less than the S&P 500. However, consumer staples typically underperform the S&P 500 in strong bull markets because their stable earnings don't benefit from economic expansion the way cyclical sectors do.

brimindinvest.com / compare / xlp-vs-vdcLIVE

XLP

Consumer Staples Select Sector SPDR Fund · ETF / Consumer Staples

$83.30

-3.24% this month

VERSUS

⟷

COMPARE

VDC

Vanguard Consumer Staples ETF · ETF / Consumer Staples

$226.11

-3.68% this month

Scoreboard verdict

Across expense ratio, momentum, yield, fund size, risk

XLP

5

VDC

0

XLP LEADS 5/5

Comparison scoreboard

XLP LEADS 5/5

Exp. Ratio

XLP ✓0.08%

VDC 0.09%

1Y Return

XLP ✓+6.43%

VDC +6.38%

Div. Yield

XLP ✓2.62%

VDC 2.15%

AUM

XLP ✓$14.86B

VDC $9.1B

Beta

XLP ✓0.49

VDC 0.52

Metrics last refreshed: 6/20/2026

Quick take

XLP vs VDC Stock Comparison: AI Score, Valuation, Performance and Upside

XLP and VDC are nearly identical consumer staples ETFs with slightly different scope. XLP holds S&P 500 consumer staples large-caps only (~37 stocks) at 0.09%. VDC holds broader US consumer staples including small/mid-caps (100+ stocks) at 0.10%. Performance differences are minimal — both are dominated by P&G, Coca-Cola, PepsiCo, and Walmart. Choose XLP for liquidity; VDC for completeness. Both are core defensive portfolio building blocks.

XLP vs VDC — Consumer Staples Select Sector SPDR (S&P 500 large-cap consumer staples with 37 holdings including P&G, Coke, Pepsi at 0.09%) versus Vanguard Consumer Staples ETF (total market consumer staples with 100+ holdings including small/mid-caps at 0.10%).

Live analysis · updated 6/20/2026

XLP holds the edge across 5 of 5 key metrics in this comparison. XLP has delivered stronger 1-year price return (+6.43% vs +6.38% for VDC).

Normalized 1Y performance

XLP

VDC

Recent returns

XLP

VDC

Who should consider this stock?

XLP may suit investors who:

→want the most liquid consumer staples ETF for tactical defensive positioning or options strategies
→value S&P 500 large-cap quality filter ensuring only proven large-cap brands with long dividend histories
→prefer 0.09% expense ratio and tightest bid-ask spreads for tactical market positions
→are comfortable with concentrated top-4 holdings and excluding smaller consumer staples companies

VDC may suit investors who:

→want the broadest US consumer staples market coverage including specialty and natural food companies outside the S&P 500
→prefer Vanguard's total market index methodology for buy-and-hold positions representing the full consumer staples opportunity set
→value slightly broader diversification beyond the top-4 concentration in XLP
→are comfortable with slightly lower liquidity and 0.10% expense ratio vs XLP's 0.09%

Performance & AI score

Metric	XLP	VDC
ETF score	43.0	42.0
Latest close	$83.30	$226.11
1M return	-3.24%	-3.68%
6M return	+6.01%	+5.50%
1Y return	+6.43%	+6.38%

$10,000 invested — hypothetical growth (dividends reinvested)

How much would $10,000 be worth today if invested at the start of each period, with all dividends reinvested?

Period	XLP	VDC
1Y ago	$10.94K (+9.4%) started 2025-06-18	$10.88K (+8.8%) started 2025-06-18
5Y ago	$15.88K (+58.8%) started 2021-06-18	$16.14K (+61.4%) started 2021-06-18
10Y ago	$27.16K (+171.6%) started 2016-06-20	$27.84K (+178.4%) started 2016-06-20

Hypothetical — past performance does not guarantee future results.

Fund characteristics

Metric	XLP	VDC
Expense ratio	0.08%	0.09%
Total assets (AUM)	$14.86B	$9.1B
Dividend yield	2.62%	2.15%
Trailing P/E	25.07	25.13
Beta	0.49	0.52
52-week change	6.43%	6.38%

Risk & fund metrics

Metric	XLP	VDC
1Y return	+6.43%	+6.38%
6M return	+6.01%	+5.50%
1M return	-3.24%	-3.68%
1Y Sharpe ratio	0.20	0.20
Beta	0.49	0.52
Dividend yield	2.62%	2.15%
5Y CAGR	+6.67%	+7.29%

Drawdown & downside risk

Lower drawdown and smaller single-period drops generally indicate a smoother ride, though they do not guarantee lower future risk.

1Y risk snapshot

XLP max drawdown9.69%

VDC max drawdown9.28%

XLP max wkly drop4.70%

VDC max wkly drop4.67%

5Y risk snapshot

XLP max drawdown16.30%

VDC max drawdown16.55%

XLP max wkly drop8.12%

VDC max wkly drop8.20%

10Y risk snapshot

XLP max drawdown24.51%

VDC max drawdown25.31%

XLP max wkly drop15.90%

VDC max wkly drop16.19%

Performance metrics by period

Period	Metric	XLP	VDC
1Y	Growth	+6.43%	+6.38%
	CAGR	+6.44%	+6.38%
	Sharpe ratio	0.20	0.20
	Max drawdown	9.69%	9.28%
	Max daily drop	2.43%	2.38%
	Max wkly drop	4.70%	4.67%
5Y	Growth	+38.11%	+42.14%
	CAGR	+6.67%	+7.29%
	Sharpe ratio	0.22	0.26
	Max drawdown	16.30%	16.55%
	Max daily drop	6.43%	6.27%
	Max wkly drop	8.12%	8.20%
10Y	Growth	+101.71%	+110.08%
	CAGR	+7.27%	+7.71%
	Sharpe ratio	0.25	0.27
	Max drawdown	24.51%	25.31%
	Max daily drop	9.40%	9.34%
	Max wkly drop	15.90%	16.19%

Fund overview

Category	XLP	VDC
Fund name	State Street Consumer Staples Select Sector SPDR ETF	Vanguard Consumer Staples Index Fund ETF Shares
Type	ETF	ETF
Expense ratio	0.08%	0.09%
Total assets (AUM)	$14.86B	$9.1B
Dividend yield	2.62%	2.15%

XLP strengths

→S&P 500 large-cap quality: XLP holds only proven large-cap consumer staples brands with long dividend histories and strong balance sheets
→Highly liquid and low cost: XLP's 0.09% expense ratio and tight bid-ask spreads make it the most accessible consumer staples sector ETF
→Pure defensive positioning: consumer staples companies sell essential products (food, beverages, household products) that consumers buy regardless of economic conditions

VDC strengths

→100+ holdings vs XLP's 37: VDC provides broader consumer staples coverage including smaller specialty brands and natural food companies
→Slightly lower Walmart concentration: VDC's broader holdings slightly dilute Walmart's outsized impact vs XLP
→Vanguard's total market methodology: capturing the full consumer staples market rather than only S&P 500 eligible companies

Risks to watch — XLP

→Walmart size relative to 'consumer staples': Walmart is classified as Consumer Staples but is really a retail conglomerate — Walmart's valuation premium and retail operations create different characteristics than a pure staples brand company
→Concentration in P&G, Coke, Pepsi: top 4 holdings represent 40%+ of XLP — not as diversified as holding count implies
→Limited small/mid-cap consumer staples: XLP excludes smaller natural and organic food brands that may offer higher growth than legacy food companies

Risks to watch — VDC

→Lower liquidity than XLP: VDC trades less than XLP — slightly wider bid-ask spreads for short-term tactical use
→Similar performance to XLP historically: the large-cap overlap means VDC and XLP have very similar returns — the extra diversification rarely creates meaningful performance difference
→Small-cap consumer staples are more obscure: the additional holdings in VDC are smaller, less-known brands that may have more company-specific risk than XLP's proven blue-chip holdings

Frequently asked questions

Consumer staples companies sell products consumers need regardless of economic conditions — food, beverages, household cleaning products, personal care, and tobacco. When a recession hits and consumers cut discretionary spending (travel, restaurants, new cars), they continue buying Tide detergent, Coca-Cola, Pampers diapers, and Colgate toothpaste. This demand inelasticity means consumer staples companies experience less revenue decline in recessions than cyclical sectors — making them defensive portfolio allocations during market downturns.

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+2.8%BUY

VDC

+1.1%HOLD

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