VDC vs RSPS: Which Consumer Staples ETF Delivers Better Value for Your Portfolio?

The Core Question: Cost vs. Strategy

When evaluating consumer staples investment options, two ETFs frequently compete for investor attention: Vanguard Consumer Staples ETF (VDC) and Invesco S&P 500 Equal Weight Consumer Staples ETF (RSPS). While both provide exposure to essential consumer goods companies, their fundamental approaches diverge significantly. The decision between them hinges on three critical factors: expense ratios, portfolio construction methodology, and historical performance outcomes.

Breaking Down the Cost Advantage

The expense ratio represents perhaps the most straightforward differentiator. VDC charges just 0.09% annually, while RSPS commands 0.40%—a 31 basis point gap that compounds substantially over decades of investing. For a $100,000 investment, this translates to $31 in annual fee differences initially, widening as assets grow.

Both funds offer identical dividend yields of 2.8%, meaning cost efficiency becomes the primary lever for long-term wealth accumulation. With VDC’s significantly lower fee structure, investors retain more capital for compounding returns rather than surrendering it to operational expenses.

The Scale and Diversification Story

VDC’s dominance becomes apparent when examining asset under management and holdings count. Vanguard’s offering holds 103 stocks across $8.6 billion in AUM, compared to RSPS’s 36 holdings managing $236.3 million. This size difference reflects not merely institutional preference but structural advantages.

VDC’s market-cap-weighted methodology means its top holdings—Walmart (14.53%), Costco Wholesale (12.00%), and Procter & Gamble (10.09%)—heavily influence overall performance. The fund’s broader portfolio includes selective exposure to consumer cyclicals and industrials, diversifying beyond pure consumer staples.

RSPS employs an equal-weight strategy across its consumer defensive holdings, resulting in positions like Dollar General (3.58%), Dollar Tree (3.58%), and Estée Lauder (3.44%) receiving equivalent weightings. This approach theoretically prevents mega-cap companies from dominating but actually introduces concentration risk among smaller constituents.

Performance Metrics Tell a Compelling Story

Over the trailing 12 months through December 2025, VDC returned -0.4%, while RSPS lagged at -2.6%—a meaningful 220 basis point divergence. Extending the analysis backward reveals even starker patterns: a $1,000 invested in VDC five years prior grew to $1,235, whereas the same RSPS allocation reached only $984.

Risk-adjusted comparisons further favor VDC. Maximum drawdown over five years measured -16.55% for VDC versus -18.64% for RSPS, indicating VDC’s market-cap-weighted structure weathered volatility better. Beta calculations show both funds exhibiting similar systematic risk (0.52 for RSPS, 0.54 for VDC), yet VDC’s larger holdings proved more resilient during market stress.

Understanding the Philosophical Divide

The fundamental tension between these consumer staples products reflects competing investment philosophies. VDC’s approach assumes that larger companies, having achieved scale and market dominance, merit higher portfolio allocation. This market-driven weighting captures how the actual consumer staples sector is structured economically.

RSPS’s equal-weight methodology operates under different assumptions: that an artificial balance across all constituents provides superior opportunity capture and reduces concentration risk. However, this strategy inadvertently concentrates holdings among smaller market-cap players and requires quarterly rebalancing, generating tax inefficiency for taxable accounts.

Making Your Selection

For investors prioritizing cost efficiency and comprehensive diversification, VDC emerges as the superior choice. Its 0.09% expense ratio, 103-holding portfolio, and demonstrated five-year outperformance of 25.1% relative to RSPS create a compelling case. The fund suits those comfortable allowing blue-chip consumer staples leaders to meaningfully influence returns.

RSPS appeals to sector purists seeking pure-play consumer defensive exposure without secondary holdings. The equal-weight structure theoretically prevents mega-caps like Walmart from monopolizing returns, though this benefit hasn’t materialized historically. This fund works for investors with specific tactical mandates around equal weighting or those seeking true 36-company consumer staples representation.

Both funds deliver the identical 2.8% dividend yield, making income production a wash. The differentiator remains philosophical: do you want market-cap-weighted efficiency (VDC) or equal-weight sector specificity (RSPS)?

Key Metrics Comparison

For most consumer staples investors, VDC’s combination of lower costs, broader holdings, and stronger historical returns makes it the default choice within this ETF comparison framework.