XLP holds the consumer staples sector of the S&P 500: food, beverage and tobacco producers, household products makers and large grocery and discount retailers. Demand for these products is less sensitive to the economic cycle, so the sector has often held up better than the market in downturns and lagged in strong rallies. A few large companies, such as Procter & Gamble, Costco, Walmart, Coca-Cola and PepsiCo, make up a large share of the fund. The sector pays steady dividends and is sensitive to interest rates, input costs and consumer trading down.
