State Street's Consumer Staples Select Sector SPDR ETF (XLP) has significantly outperformed First Trust's Nasdaq Food & Beverage ETF (FTXG) across multiple performance metrics, reflecting the advantages of a diversified approach within the consumer staples sector. Over the past year, XLP returned 11.12% compared to FTXG's 6.87%, while over five years, a $1,000 investment in XLP grew to $2,332 versus $1,925 for FTXG. This performance differential is underscored by a substantial cost advantage, with XLP charging an expense ratio of 0.08% annually against FTXG's 0.60%.
The structural differences between the two funds partially explain their divergent trajectories. XLP provides exposure across the entire consumer staples universe—including household products, personal care, and pharmaceuticals alongside food and beverages—whereas FTXG concentrates exclusively on food and beverage manufacturers and distributors. XLP's broader mandate has been supported by $27.5 billion in assets under management, compared to FTXG's more modest asset base, and the fund's established track record dating to 1998 reflects decades of market participation.
For investors seeking exposure to defensive consumer staples holdings, the performance gap between these vehicles underscores how fee structures and diversification breadth can materially impact long-term returns. XLP's lower expense ratio compounds substantially over time, while its sector-wide approach provides greater diversification benefits than FTXG's narrower food and beverage focus.