Comparing Vanguard and State Street Consumer Staples ETFs
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jun 27 2026
0mins
Source: Yahoo Finance
- Fund Overview: Vanguard Consumer Staples ETF (VDC) and State Street Consumer Staples Select Sector SPDR ETF (XLP) manage $9.1 billion and $13.8 billion in assets respectively, with XLP offering a higher dividend yield of 2.6% compared to VDC's 2.2%, making it more appealing for income-seeking investors.
- Holdings Structure: XLP focuses on a concentrated basket of 35 holdings primarily from the S&P 500, with top positions including Walmart (11.19%), Costco (9.19%), and Procter & Gamble (7.49%), while VDC boasts 103 holdings with larger allocations to Walmart (14.49%), Costco (11.83%), and Procter & Gamble (8.69%), showcasing VDC's diversification advantage.
- Risk and Return: Over the past five years, VDC experienced a maximum drawdown of 16.5% compared to XLP's 16.3%, and while their returns are similar, a $1,000 investment in VDC grew to $1,428 versus $1,382 for XLP, indicating a slight edge for VDC in long-term performance.
- Liquidity Comparison: XLP's average trading volume is over 25 times that of VDC, which may attract investors looking for quick entry and exit opportunities during market volatility, although both funds share a high overlap in their top ten holdings, with VDC offering greater diversification.
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Analyst Views on STT
Wall Street analysts forecast STT stock price to fall
12 Analyst Rating
7 Buy
4 Hold
1 Sell
Moderate Buy
Current: 175.960
Low
128.00
Averages
142.27
High
168.00
Current: 175.960
Low
128.00
Averages
142.27
High
168.00
About STT
State Street Corporation is a financial holding company. The Company, through its subsidiary, State Street Bank and Trust Company (State Street Bank), provides a range of financial products and services to institutional investors. It operates through two lines of business: Investment Servicing and Investment Management. Its Investment Servicing line of business provides a range of services and market and financing solutions to institutional clients, including mutual funds, collective investment funds and other investment pools, corporate and public retirement plans, insurance companies, investment managers, foundations and endowments worldwide. Through State Street Investment Services, State Street Markets and State Street Alpha, it offers a range of solutions, including transaction management, derivatives, collateral services, and others. Investment Management line of business provides a range of investment management solutions and products through State Street Investment Management.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Market Health Signals: Strong Performance in Healthcare and Agriculture Stocks
- Healthcare Stock Rebound: Merck (MRK) has seen a cumulative return of -5% from 2023 to 2025, yet it has risen approximately 14% YTD, reaching an all-time high on June 29, indicating market confidence in its future despite the looming patent expiration of Keytruda.
- Strong Agricultural Stocks: Archer-Daniels-Midland (ADM) is up about 29% YTD, reporting $20.5 billion in Q1 revenue, with management raising full-year adjusted EPS guidance to $4.15-$4.70, driven by new federal biofuel blending requirements and rising soybean oil prices.
- Outstanding Asset Management Performance: State Street Corp. (STT) has surged 60% over the past year, with Q1 total revenue increasing 16% year-over-year to $3.8 billion, and management raising full-year fee revenue growth guidance to 7-9%, reflecting strong market demand and profitability.
- Market Rotation Strategy: As the S&P 500 continues to churn, investors are advised to focus on strong stocks in underperforming sectors, particularly in healthcare and agriculture, to capitalize on potential opportunities during market rotations.
See More
Five ETFs Limit Investment Diversification
- ETF Overview: The five ETFs represent broad U.S. market indexes, highlighting the limitations investors face in diversifying their portfolios, particularly in accessing bonds or international markets.
- Lack of Diversification: As these ETFs are primarily focused on the U.S. market, investors may miss out on potential gains from global economic growth, restricting their asset allocation flexibility.
- Concentration Risk: Relying heavily on single-market ETFs can lead to concentrated portfolio risks, especially during fluctuations in the U.S. economy, which may negatively impact overall returns for investors.
- Need for Strategy Adjustment: Investors must reassess their investment strategies to seek more diversified investment vehicles, particularly in light of increasing global economic uncertainties.
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Trump Accounts Introduce New Investment Options
- Diverse Investment Options: The U.S. Treasury announced that Trump Accounts will invest in ETFs from State Street, BlackRock, and Vanguard, with the SPDR S&P 500 ETF (SPYM) as the default option, designed to provide broad exposure to the U.S. stock market while keeping expenses below statutory limits, thus offering a cost-effective choice for investors.
- Account Management and Contributions: Initial accounts will be managed by Bank of New York Mellon, allowing parents and guardians to contribute up to $5,000 annually per child, while the Treasury will provide a one-time $1,000 pilot program contribution for babies born from 2025 to 2028, incentivizing families to invest for their children's future.
- Corporate Support and Matching: An increasing number of companies, including State Street and BlackRock, have pledged to match the $1,000 Treasury deposit for employees' children, which not only enhances employee benefits but also promotes investment awareness among families, further driving the adoption of child investment accounts.
- Investment Strategy and Risks: While Trump Accounts offer 100% equity investment options, a Vanguard research note pointed out that unlike other account types, such as 529 college savings plans, Trump Accounts do not gradually de-risk towards a bond allocation, potentially exposing investors to higher volatility risks over the long term.
See More
Custody Banks Outperform Traditional Banks Significantly
- Strong Performance of Custody Banks: Year-to-date, custody banks like State Street and BNY Mellon have surged 32% and 26% respectively, indicating their ability to attract more client assets during market volatility, thereby enhancing revenue and market position.
- Revenue Growth Drivers: BNY Mellon reported first-quarter revenue of $5.4 billion, a 13% year-over-year increase, with fee income and net interest income rising by 12% and 18% respectively, reflecting improved profitability in a high-interest-rate environment.
- Increase in Client Assets: Amid market uncertainty, BNY Mellon saw a 12% rise in assets under custody and a 13% surge in average deposits, which not only boosted fee income but also strengthened client trust and market share.
- Optimistic Future Outlook: With the S&P 500 rising nearly 15% in Q2, custody banks are expected to report new records in assets and revenue in their upcoming Q2 earnings, further solidifying their market leadership.
See More
Custody Banks Show Strong Performance, Investment Opportunities Arise
- Strong Market Performance: State Street's stock has surged 32% this year, while BNY Mellon and Northern Trust have increased by 26% and 29% respectively, indicating strong performance in the custody banking sector that attracts investor interest.
- Significant Revenue Growth: BNY Mellon reported first-quarter revenue of $5.4 billion, up 13% year-over-year, with fee income rising 12% to $3.8 billion and net income soaring 36% to $1.6 billion, demonstrating profitability growth even in volatile markets.
- Asset Management Advantage: BNY Mellon oversees $59 trillion in client assets, with custody assets increasing by 12% and average deposits surging 13% year-over-year, reflecting heightened demand for safe assets among clients, which further drives revenue growth.
- Optimistic Future Outlook: With the S&P 500 rising nearly 15% in Q2, custody banks are expected to see record highs in assets under custody and revenue, as State Street, BNY Mellon, and Northern Trust prepare to release their Q2 earnings, generating market anticipation for their performance.
See More
U.S. Treasury Selects SPYM as Default ETF for Trump Accounts
- Low-Cost ETF Selection: The U.S. Treasury has chosen State Street's SPDR Portfolio S&P 500 ETF (SPYM) as the default ETF for Trump Accounts, aimed at providing children with broad access to the U.S. stock market while maintaining low expenses, which is expected to foster a culture of long-term investing.
- Innovative Investment Accounts: The Trump Accounts program is set to launch on July 4, 2026, allowing U.S. children born between 2025 and 2028 to receive a one-time $1,000 contribution from the Treasury, designed to help families engage in investing early through simple, low-cost index-based exposure.
- Annual Contribution Limits: Each U.S. child under 18 can contribute up to $5,000 annually to a Trump Account, with all eligible contributions automatically invested in SPYM, which will further drive long-term investment growth for families.
- Corporate Responsibility Expansion: State Street has also committed to matching the Treasury's contribution for eligible children of active employees, enhancing investment opportunities for families and demonstrating the company's commitment to promoting long-term investing.
See More
Market Health Signals: Strong Performance in Healthcare and Agriculture Stocks
- Healthcare Stock Rebound: Merck (MRK) has seen a cumulative return of -5% from 2023 to 2025, yet it has risen approximately 14% YTD, reaching an all-time high on June 29, indicating market confidence in its future despite the looming patent expiration of Keytruda.
- Strong Agricultural Stocks: Archer-Daniels-Midland (ADM) is up about 29% YTD, reporting $20.5 billion in Q1 revenue, with management raising full-year adjusted EPS guidance to $4.15-$4.70, driven by new federal biofuel blending requirements and rising soybean oil prices.
- Outstanding Asset Management Performance: State Street Corp. (STT) has surged 60% over the past year, with Q1 total revenue increasing 16% year-over-year to $3.8 billion, and management raising full-year fee revenue growth guidance to 7-9%, reflecting strong market demand and profitability.
- Market Rotation Strategy: As the S&P 500 continues to churn, investors are advised to focus on strong stocks in underperforming sectors, particularly in healthcare and agriculture, to capitalize on potential opportunities during market rotations.
See More
Five ETFs Limit Investment Diversification
- ETF Overview: The five ETFs represent broad U.S. market indexes, highlighting the limitations investors face in diversifying their portfolios, particularly in accessing bonds or international markets.
- Lack of Diversification: As these ETFs are primarily focused on the U.S. market, investors may miss out on potential gains from global economic growth, restricting their asset allocation flexibility.
- Concentration Risk: Relying heavily on single-market ETFs can lead to concentrated portfolio risks, especially during fluctuations in the U.S. economy, which may negatively impact overall returns for investors.
- Need for Strategy Adjustment: Investors must reassess their investment strategies to seek more diversified investment vehicles, particularly in light of increasing global economic uncertainties.
See More
Trump Accounts Introduce New Investment Options
- Diverse Investment Options: The U.S. Treasury announced that Trump Accounts will invest in ETFs from State Street, BlackRock, and Vanguard, with the SPDR S&P 500 ETF (SPYM) as the default option, designed to provide broad exposure to the U.S. stock market while keeping expenses below statutory limits, thus offering a cost-effective choice for investors.
- Account Management and Contributions: Initial accounts will be managed by Bank of New York Mellon, allowing parents and guardians to contribute up to $5,000 annually per child, while the Treasury will provide a one-time $1,000 pilot program contribution for babies born from 2025 to 2028, incentivizing families to invest for their children's future.
- Corporate Support and Matching: An increasing number of companies, including State Street and BlackRock, have pledged to match the $1,000 Treasury deposit for employees' children, which not only enhances employee benefits but also promotes investment awareness among families, further driving the adoption of child investment accounts.
- Investment Strategy and Risks: While Trump Accounts offer 100% equity investment options, a Vanguard research note pointed out that unlike other account types, such as 529 college savings plans, Trump Accounts do not gradually de-risk towards a bond allocation, potentially exposing investors to higher volatility risks over the long term.
See More
Custody Banks Outperform Traditional Banks Significantly
- Strong Performance of Custody Banks: Year-to-date, custody banks like State Street and BNY Mellon have surged 32% and 26% respectively, indicating their ability to attract more client assets during market volatility, thereby enhancing revenue and market position.
- Revenue Growth Drivers: BNY Mellon reported first-quarter revenue of $5.4 billion, a 13% year-over-year increase, with fee income and net interest income rising by 12% and 18% respectively, reflecting improved profitability in a high-interest-rate environment.
- Increase in Client Assets: Amid market uncertainty, BNY Mellon saw a 12% rise in assets under custody and a 13% surge in average deposits, which not only boosted fee income but also strengthened client trust and market share.
- Optimistic Future Outlook: With the S&P 500 rising nearly 15% in Q2, custody banks are expected to report new records in assets and revenue in their upcoming Q2 earnings, further solidifying their market leadership.
See More
Custody Banks Show Strong Performance, Investment Opportunities Arise
- Strong Market Performance: State Street's stock has surged 32% this year, while BNY Mellon and Northern Trust have increased by 26% and 29% respectively, indicating strong performance in the custody banking sector that attracts investor interest.
- Significant Revenue Growth: BNY Mellon reported first-quarter revenue of $5.4 billion, up 13% year-over-year, with fee income rising 12% to $3.8 billion and net income soaring 36% to $1.6 billion, demonstrating profitability growth even in volatile markets.
- Asset Management Advantage: BNY Mellon oversees $59 trillion in client assets, with custody assets increasing by 12% and average deposits surging 13% year-over-year, reflecting heightened demand for safe assets among clients, which further drives revenue growth.
- Optimistic Future Outlook: With the S&P 500 rising nearly 15% in Q2, custody banks are expected to see record highs in assets under custody and revenue, as State Street, BNY Mellon, and Northern Trust prepare to release their Q2 earnings, generating market anticipation for their performance.
See More
U.S. Treasury Selects SPYM as Default ETF for Trump Accounts
- Low-Cost ETF Selection: The U.S. Treasury has chosen State Street's SPDR Portfolio S&P 500 ETF (SPYM) as the default ETF for Trump Accounts, aimed at providing children with broad access to the U.S. stock market while maintaining low expenses, which is expected to foster a culture of long-term investing.
- Innovative Investment Accounts: The Trump Accounts program is set to launch on July 4, 2026, allowing U.S. children born between 2025 and 2028 to receive a one-time $1,000 contribution from the Treasury, designed to help families engage in investing early through simple, low-cost index-based exposure.
- Annual Contribution Limits: Each U.S. child under 18 can contribute up to $5,000 annually to a Trump Account, with all eligible contributions automatically invested in SPYM, which will further drive long-term investment growth for families.
- Corporate Responsibility Expansion: State Street has also committed to matching the Treasury's contribution for eligible children of active employees, enhancing investment opportunities for families and demonstrating the company's commitment to promoting long-term investing.
See More
