The Consumer Staples Select Sector SPDR Fund (XLP) offers targeted exposure to companies in the S&P 500 that produce and distribute essential goods and services. This includes household names in food, beverages, tobacco, and personal care products. Designed as a defensive sector ETF, XLP is often seen as a haven during periods of market volatility.
| Rank | Symbol | Company | % Weight |
|---|---|---|---|
| 1 | WMT | Walmart Inc. | 10.66% |
| 2 | COST | Costco Wholesale Corp | 9.56% |
| 3 | PG | Procter & Gamble | 8.41% |
| 4 | PM | Philip Morris International | 6.04% |
| 5 | KO | Coca-Cola Co | 5.99% |
| 6 | MDLZ | Mondelez International Inc | 4.67% |
| 7 | MO | Altria Group Inc | 4.55% |
| 8 | PEP | PepsiCo Inc | 4.53% |
| 9 | CL | Colgate-Palmolive Co | 4.33% |
| 10 | MNST | Monster Beverage Corp | 3.13% |
| 11 | KMB | Kimberly-Clark Corp | 2.73% |
| 12 | TGT | Target Corp | 2.69% |
| 13 | KR | Kroger Co | 2.68% |
| 14 | SYY | Sysco Corp | 2.63% |
| 15 | KDP | Keurig Dr Pepper Inc | 2.33% |
| 16 | KVUE | Kenvue Inc. | 2.12% |
| 17 | ADM | Archer-Daniels-Midland Co | 1.96% |
| 18 | HSY | Hershey Foods Corp | 1.87% |
| 19 | GIS | General Mills Inc | 1.80% |
| 20 | DG | Dollar General Corp | 1.51% |
| 21 | KHC | Kraft Heinz Co | 1.49% |
| 22 | CHD | Church & Dwight Co | 1.42% |
| 23 | K | Kellanova | 1.41% |
| 24 | EL | Estée Lauder Cos. A | 1.37% |
| 25 | STZ | Constellation Brands Inc. A | 1.27% |
In 2025, however, the fund has underperformed, posting a (0.5%) year-to-date return with a (0.7%) CAGR over the measured period. Despite the sector’s reputation for stability, inflationary pressures, shifting consumer demand, and weaker pricing power have weighed on staples. Investors seeking growth have shifted their focus toward technology and cyclicals, leaving staples lagging.
Still, XLP’s holdings are some of the most durable franchises in the U.S. economy. From Walmart and Costco to Procter & Gamble and Coca-Cola, these companies remain central to consumer spending habits and global supply chains. For long-term investors, XLP remains a steady and income-generating allocation.
1. Walmart (WMT)
Walmart is XLP’s largest holding, at 10.66% of the fund. As the world’s biggest retailer, Walmart operates a massive network of stores and e-commerce platforms, serving millions of consumers daily. Its scale enables it to negotiate favorable terms with suppliers and maintain pricing advantages, making it a cornerstone of the consumer staples industry.
Despite thin margins, Walmart’s consistent revenue growth and expansion into digital retail have enhanced its resilience. Its omnichannel strategy and focus on grocery and essentials ensure stable demand, even during economic downturns. By blending brick-and-mortar convenience with e-commerce scale, Walmart continues to strengthen its competitive moat.
The company is also branching into adjacent areas, including healthcare clinics, financial services, and last-mile delivery, moves that reflect its adaptability and ambition. Walmart’s sheer size and cash flow provide stability, while its willingness to innovate ensures long-term relevance. For XLP investors, Walmart delivers both defensive security and exposure to a retailer shaping the future of global commerce.
2. Costco Wholesale Corp (COST)
Costco is the second-largest holding, accounting for 9.56% of the fund. The membership-based retailer is known for its bulk pricing, limited selection strategy, and loyal customer base. Costco’s model has proven highly resilient, allowing it to deliver steady growth through strong renewal rates and consistent customer traffic.
While the stock trades at a premium valuation, investors reward Costco for its predictable earnings, special dividends, and reliable cash returns. Its global expansion, from Asia to Europe, adds to its growth potential while maintaining the company’s disciplined operating model. This combination of financial strength and international reach makes Costco a compelling long-term investment.
Costco’s strength lies in its simplicity: a business model that thrives on high-volume, low-margin efficiency while cultivating unmatched brand loyalty. Even during inflationary periods, Costco captures consumers seeking value, further solidifying its enduring appeal. For XLP, Costco provides exposure to one of the most consistent and durable growth stories in the retail sector.
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3. Procter & Gamble (PG)
Procter & Gamble, with a weighting of 8.41%, is one of the world’s largest consumer goods companies, boasting a portfolio of iconic brands such as Tide, Pampers, Gillette, and Crest. Its broad reach across household and personal care categories ensures stable demand, regardless of economic cycles. The company’s scale and global distribution networks make it one of the most reliable players in the consumer staples sector.
In recent years, P&G has sharpened its focus on efficiency and brand equity, leveraging innovation, supply-chain optimization, and targeted marketing to maintain pricing power. This has enabled it to weather input cost pressures while maintaining its margins. With broad consumer recognition, P&G continues to enjoy customer loyalty and consistent sales growth.
For investors, P&G also stands out as a dividend powerhouse, with decades of increases that appeal to income-seeking portfolios. Its global footprint, steady product innovation, and commitment to shareholder returns cement its role as a defensive cornerstone. Within XLP, P&G offers both resilience and long-term income stability.
What XLP Really Owns
XLP’s top holdings, Walmart, Costco, and Procter & Gamble, anchor the fund with retail and household essentials that remain indispensable to consumers. These companies provide predictable cash flow and defensive stability, even if growth is slower compared to other sectors.
The broader mix, including Coca-Cola, Philip Morris, PepsiCo, and Colgate-Palmolive, rounds out the fund with strong brand leaders in beverages, tobacco, and personal care. Together, they offer reliable dividends and global diversification, even in the face of adverse market conditions.
Key Insights
- Defensive focus: Anchored by Walmart, Costco, and Procter & Gamble, XLP emphasizes resilience in consumer demand.
- Challenging year: A (0.5%) YTD decline reflects sector headwinds from inflation and shifting consumer behavior.
- Brand strength: Staples like Coca-Cola, Philip Morris, and PepsiCo ensure global relevance and steady dividends.
- Portfolio role: XLP remains a defensive building block, balancing risk during uncertain markets.
Why You Should Invest In Consumer Staples
The Consumer Staples Select Sector SPDR Fund (XLP) has struggled in 2025, with a modest (0.5%) YTD decline. While the sector is known for defensive strength, rising input costs and shifting consumer preferences have pressured margins and slowed growth.
Despite near-term weakness, XLP remains a core defensive allocation for portfolios. Its companies dominate categories that consumers rely on daily, from food and beverages to household goods. This consistency supports dividend income and reduces volatility during market downturns.
For investors seeking balance, XLP offers an essential counterweight to growth-oriented sectors. While not a performance leader in 2025, it remains a vital holding for risk management and steady income generation.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
