VDC vs XLP

VDCBVanguard Consumer Staples ETF

XLPAState Street Consumer Staples Select Sector SPDR ETF

In short

VDC Vanguard's take on the boring-on-purpose sector: about 100 US large-, mid- and small-cap staples names (soap, soda, groceries) for 0.09% a year, running since 2004.

XLP One of the original sector funds, live since December 1998. XLP is the S&P 500's staples aisle: roughly 40 makers of soap, soda, snacks and smokes, cap-weighted, for eight basis points.

Stated mandate

VDC The fund seeks to track the MSCI US Investable Market Consumer Staples 25/50 Index, which measures the performance of large-, mid-, and small-cap U.S. consumer staples stocks.

XLP The fund seeks to track, before expenses, the price and yield performance of the Consumer Staples Select Sector Index, representing U.S. consumer staples companies.

Why people hold it

• VDC Charges 0.09% a year. Only XLP and FSTA sit lower at 0.08%, while the equal-weight and global alternatives (RSPS, KXI) run 0.38% to 0.40%.
• Its index spans large-, mid- and small-cap US staples, roughly 100 stocks, so mid-sized beverage and household-products makers count, not just the mega-cap handful.
• Hugs its MSCI benchmark tightly, one of the closer index implementations among broad consumer staples funds.
• A multi-billion-dollar fund that has been trading since 2004 and pays out quarterly.

• XLP 0.08% a year against a peer-group median of 0.40%. In a slow-and-steady sector, that fee gap is one of the few things you actually control.
• Part of the first suite of sector ETFs launched in 1998, and still a multi-billion-dollar fund that trades very actively. Getting in and out is rarely the hard part.ssga.com
• Ties FSTA on fee and undercuts VDC, while holding strictly to S&P 500 members rather than a wider universe. Clean, literal exposure to the index's staples slice.ssga.com
• Among the strongest implementations in the staples cohort: broad mandate, quarterly distributions, no structural quirks buried in the wrapper.

Worth knowing

• VDC One sector, one story. Staples move with grocery aisles and household budgets, not the broad market.
• Even with the index's 25/50 diversification caps, a few giant food, beverage and retail names carry most of the weight.
• Moderately traded rather than the category's volume leader, so limit orders earn their keep on larger trades.

• XLP About 40 names, market-cap weighted with index caps applied for diversification. The biggest retailers and household-product giants still carry outsized weight.spglobal.com
• U.S. only. Foreign staples heavyweights sit outside the mandate; KXI casts a global net, and RSPS spreads weight evenly instead of by size.
• This is one slice of the S&P 500, not a diversified core. Staples run on their own cycle and can drift far from the broad market for long stretches.

Full VDC profile⁠

Full XLP profile⁠