State Street Consumer Staples Select Sector SPDR ETF vs. Invesco Food & Beverage ETF
The State Street Consumer Staples Select Sector SPDR ETF (XLP +0.34%) and the Invesco Food & Beverage ETF (PBJ +0.50%) both offer pathways to invest in U.S. consumer staples, but they diverge in focus and structure.
XLP aims to keep costs low, enhance revenue, and span various sectors within consumer staples. On the other hand, PBJ narrows its focus predominantly to food and beverage companies.
Snapshots (Cost and Size)
| Metric | XLP | PBJ |
|---|---|---|
| Publisher | State Street | Invesco |
| Expense Ratio | 0.08% | 0.61% |
| 1-Year Return (as of April 2, 2026) | 2.6% | 8.0% |
| Dividend Yield | 2.4% | 1.6% |
| Beta | 0.59 | 0.72 |
| Assets | $17.6 billion | $89.7 million |
The beta value indicates the price volatility compared to the S&P 500, derived from five years of monthly returns. The one-year return reflects a total return for the upcoming 12 months.
XLP stands out with an expense ratio of just 0.08%, which is notably lower than PBJ’s 0.61%. Moreover, XLP provides a better dividend yield of 2.4% versus PBJ’s 1.6%, which might attract those focused on income.
Comparing Performance and Risk
| Metric | XLP | PBJ |
|---|---|---|
| Maximum Drawdown (5 Years) | -16.32% | -15.83% |
| $1,000 Growth in 5 Years | $1,370 | $1,327 |
While PBJ shows better performance in the previous year, XLP slightly outpaces in five-year total returns. Both ETFs exhibit beta values below 1.0, indicating they typically experience less volatility compared to the wider market, which is a common preference for consumer staples ETFs during economic uncertainties.
What’s Inside
PBJ comprises about 30 stocks with an emphasis on food and beverage sectors, leaning towards agricultural supplies and food distribution. Its top holdings include Corteva (CTVA +1.61%), Kroger (KR +2.62%), and Archer-Daniels-Midland (ADM +2.03%). This focus may attract those seeking targeted investments with a hint of diversification away from just consumer products.
In contrast, XLP includes 35 stocks, tracking the S&P consumer staples sector, with a mix of household goods, personal care, and retail leaders. Key positions consist of Walmart (WMT +0.62%), Costco Wholesale (COST +1.29%), and Procter & Gamble (PG 0.50%). These three account for 29% of XLP’s holdings. XLP is more suited for those wanting a broad array of blue-chip stocks without drifting too far from the consumer staples realm.
What This Means for Investors
Consumer staples ETFs often fly under the radar in terms of explosive growth, and that’s typically how they operate. Given the current inflationary pressures on budgets, defensive funds like XLP and PBJ are witnessing newfound interest as stabilizers in portfolios.
Your choice between these two funds will come down to what you value more. If cost efficiency and revenue growth are key, XLP is compelling, offering one of the best-value options for diversified sector exposure at just 0.08% annually. Its 2.4% yield tops PBJ’s 1.6%, and it includes some of the most reliable names in the U.S. economy, which tend to withstand consumer spending cutbacks.
On the flip side, PBJ emphasizes the food and beverage industry, which has led it to outperform XLP recently. This focus could appeal to investors who believe food-related companies are strategically positioned right now. But just keep in mind, you’ll be paying a premium; PBJ’s 0.61% expense ratio is significantly higher than that of XLP.
For most long-term investors prioritizing simplicity and lower costs, XLP is hard to surpass. However, for those who have strong conviction in the food and beverage sector and can handle the higher fees and lower yields, PBJ could be the better choice.
