What XLP actually is

XLP follows the consumer staples companies in the S&P 500, one of the Select Sector SPDR funds.

What is inside

Large, well-known companies such as Procter & Gamble, Coca-Cola, PepsiCo, Walmart and Costco, plus tobacco and household products firms.

Distributions

XLP pays quarterly and the yield is moderate. Many holdings are long-time dividend raisers, which is why this fund is popular for stable income.

What to keep in mind

  • Slow growth. Mature businesses grow modestly.
  • Inflation and costs. They pressure margins.
  • Valuation. Defensive stocks can be expensive.

Quick take

XLP is a steady, defensive sector fund with a reliable dividend, but modest growth.