Quick Read – Consumer Staples Select Sector SPDR Fund (XLP) holds 35 S&P 500 consumer staples companies with Walmart at 12%, Costco at 10%, and Procter & Gamble at 7%, paying a 2.57% yield while charging only 0.08% annually.
In November 2021 through December 2022, XLP gained 8% while the Invesco QQQ Trust (QQQ) fell 31%, demonstrating its hedge value during tech downturns. – XLP functions as a defensive portfolio hedge for investors overexposed to AI, semiconductors, and large-cap tech, offering historical resilience during market corrections at the cost of underperformance during sustained bull markets. – The analyst who called NVIDIA in 2010 just named his top 10 stocks and Consumer Staples Select Sector SPDR Fund wasn’t one of them
Get them here FREE. If you are sitting on a portfolio that has ridden Nvidia (NASDAQ:NVDA), the hyperscalers, and every adjacent AI name to fresh highs, the question is what happens when the narrative cracks. The Consumer Staples Select Sector SPDR Fund (NYSEARCA:XLP) is the unglamorous answer most AI-heavy investors have not bothered to consider.
XLP owns the companies that sell toothpaste, soda, and groceries, and it has a track record of holding its value while the NASDAQ gives back twelve months of gains in three weeks. The numbers behind it are more interesting than the boring reputation suggests. What you are actually buying XLP is a concentrated bet on 35 holdings drawn from the S&P 500 consumer staples sector.