Cheap, Big XLP Beats Small, Niche FTXG as Defensive Staples Options

The gap matters because XLP’s far lower fees and much larger size change long‑term returns and trading costs for investors.

Overview

XLP is the dominant broad consumer staples ETF with about $14.9 billion in assets and a 0.08% expense ratio, while FTXG is a very small food‑and‑beverage smart‑beta ETF with roughly $22.2 million in assets and a 0.60% fee.
Over the five‑year window shown, $1,000 invested in XLP grew to about $1,387 compared with roughly $1,001 in FTXG, and XLP had a smaller five‑year maximum drawdown than FTXG.
Both funds offer similar trailing 12‑month dividend yields near 2.6–2.7%, but they follow different index rules: XLP tracks a market‑cap S&P staples index while FTXG follows a Nasdaq smart‑beta food and beverage index that tilts by factors like volatility and growth.
The funds’ holdings and structure create different risks: XLP is broad and heavy in retailers and mega caps such as Walmart, Costco and Procter & Gamble, while FTXG is concentrated in food processors like ADM, Mondelez and Kraft‑Heinz, which raises concentration, liquidity and closure risk for FTXG.
For long‑term investors the tradeoff is clear: XLP’s low cost and scale tend to lower trading and tax friction and compound better over time, while FTXG may suit those who specifically want a factor‑tilted food‑and‑beverage slice and who accept higher fees and implementation risk.