Investors comparing exchange-traded funds focused on consumer staples are weighing two very different approaches: broad, low-cost exposure through the State Street Consumer Staples Select Sector SPDR and a narrower food-and-beverage strategy from First Trust. The State Street fund’s much lower ongoing fee and stronger multi-year performance metrics stand out versus the First Trust vehicle, despite the latter offering a slightly higher trailing dividend yield.
Key takeaways
- Cost difference: The State Street Consumer Staples Select Sector SPDR charges an expense ratio of 0.08% versus 0.6% for the First Trust Nasdaq Food & Beverage ETF.
- Total return contrast: Over the last year (as of June 18, 2026), the State Street fund delivered 6.43% versus 1.44% for the First Trust fund.
- Dividend yield: The First Trust fund’s trailing-12-month yield is 2.74%, slightly above the State Street fund’s 2.62%.
- Holdings focus: State Street provides diversified staples exposure, while First Trust concentrates on food and beverage stocks with a factor-based index methodology.
- Implication for investors: For a defensive allocation where fee drag matters, the State Street fund’s structure and scale appear to offer a more efficient risk-and-return profile.
Expense ratio and yield: the first filter for long-term investors
Data shows the State Street Consumer Staples Select Sector SPDR is built for cost-conscious investors. Its expense ratio of 0.08% is a fraction of the 0.6% charged by the First Trust Nasdaq Food & Beverage ETF.
On income, the First Trust fund provides a slightly higher trailing-12-month dividend yield of 2.74% compared with 2.62% for State Street. Even with that yield edge, the 0.52 percentage-point annual cost difference can meaningfully influence long-term compounding, particularly for investors holding through full market cycles.
Performance and downside: defensive exposure with different outcomes
According to the metrics provided in the comparison, the State Street fund has outperformed on recent and longer time horizons. Over the trailing 12 months (as of June 18, 2026), the State Street ETF posted 6.43% in total return versus 1.44% for the First Trust fund.
Risk and drawdown measures also favored State Street. The reported five-year max drawdown was (16.3%) for the State Street ETF compared with (21.7%) for the First Trust fund. Over the same multi-year window, growth of $1,000 over five years (total return) increased to $1,387 for the State Street fund versus $1,001 for the First Trust fund, based on the figures cited.
In practical terms, while both ETFs target defensive characteristics associated with consumer staples, the narrower food-and-beverage focus and the smart-beta construction in the First Trust strategy have correlated with weaker results across the cited periods.
What’s inside the funds: broad staples versus a narrower food-and-beverage bet
The portfolio construction differs in ways that can drive performance during both stable and volatile markets. The State Street Consumer Staples Select Sector SPDR is concentrated in consumer defensive exposure (reported at 99%) with a small 1% allocation to consumer cyclical stocks across its 35 holdings.
Its largest positions include Walmart, Costco Wholesale, and Procter & Gamble, at 10.83%, 9.1%, and 7.1% respectively, according to the allocation figures provided. The fund launched in 1998 and paid $2.18 per share over the trailing 12 months, as stated.
By contrast, the First Trust Nasdaq Food & Beverage ETF is narrower by design, with exposure concentrated at 94% in consumer defensive, 4% in basic materials, and 2% in industrials across 31 holdings. The largest positions listed are Archer-Daniels-Midland (9.9%), Mondelez International (8.5%), and Kraft-Heinz (8.3%).
The First Trust fund launched in 2016 and paid $0.61 per share over the trailing 12 months, per the cited data.
Liquidity and scale: a practical concern for investors
The comparison also highlights fund scale, which can matter for investors thinking about long-term holding risk. The First Trust ETF is listed with assets under management of $22.2 million, while the State Street fund is substantially larger at $14.9 billion. The First Trust fund’s smaller size has been associated with a higher risk of sponsor action, including potential closure, based on the guidance described in the comparison.
For investors building a defensive sleeve, the State Street ETF’s larger asset base and long operating history can reduce operational uncertainty compared with a smaller, more specialized fund.
Bottom line: choosing the more efficient defensive exposure
Based on the cited expense, return, and drawdown measures, the State Street Consumer Staples Select Sector SPDR appears better positioned as a core defensive allocation. Its lower cost structure and stronger performance outcomes over the last year and multi-year periods outweigh the First Trust fund’s modest dividend yield advantage.
The key trade-off is focus and methodology: First Trust offers a smart-beta, food-and-beverage-specific approach, while State Street provides broader staples exposure through a market-cap-weighted structure. For investors prioritizing defensive stability with less fee drag, the data presented supports the State Street option as the more efficient choice.
What to watch next: Investors considering either ETF may want to monitor upcoming consumer staples earnings, guidance on pricing power and demand, and broader macro drivers such as interest-rate expectations and inflation trends—factors that often influence defensives and dividend-paying sectors. Tracking how each fund’s holdings respond during shifts in consumer spending and input-cost dynamics could also help refine expectations for the next few quarters.
