Equal Weight vs. Cap Weight in Consumer Staples: RSPS or XLP

Motley Fool reported on Aug. 22, 2026 that State Street's market-cap-weighted XLP delivered 22% stronger five-year gains than Invesco's equal-weight RSPS, which spreads exposure more evenly across staples names; XLP last closed at 85.99 and RSPS at 31.67 on Aug. 21, 2026.

Two funds, one sector, two very different ideas about how much any single company should matter. Over the past five years, the more concentrated of the pair won — and by a wide margin.

State Street's cap-weighted consumer staples ETF, XLP, delivered five-year gains 22% stronger than Invesco's equal-weight staples fund, RSPS, according to a comparison published by Motley Fool. That is the headline number, and it settles the backward-looking argument. It does not, on its own, settle the forward-looking one.

What the two weighting schemes actually do

Market-cap weighting is the default of the index world. Every holding is sized in proportion to the total value of its outstanding shares, so the largest packaged-food, beverage and household-products companies in the sector absorb the biggest slice of the fund. Buy XLP and you are buying, in effect, a scaled-down replica of the sector's existing pecking order. The giants dominate; the smaller names round out the tail.

Equal weighting throws that hierarchy out. RSPS assigns each constituent the same target slice regardless of size, and rebalances back toward that target on a set schedule — trimming what has run up, adding to what has lagged. The mechanical consequence is a persistent tilt toward the smaller and mid-sized members of the staples universe and away from the mega-caps that anchor the cap-weighted version.

Neither approach is inherently smarter. They are bets on different things. Cap weighting bets that the sector's largest companies will keep compounding. Equal weighting bets that the rest of the field will close the gap — and that concentration risk is a cost worth paying to avoid.

Why the cap-weighted fund pulled ahead

A 22% five-year performance gap in a sector as staid as consumer staples is not a rounding error. The most straightforward explanation for a gap of that shape is breadth: when a handful of the very largest names carry the sector's returns, a fund that owns them in size beats a fund that deliberately caps their influence.

That pattern has been visible well beyond staples. The broad market itself has spent recent years leaning on a narrow group of leaders, and equal-weight versions of major indexes have generally trailed their cap-weighted parents as a result. Staples appears to have run the same script, just quieter.

The flip side is what happens when leadership rotates. Equal-weight strategies tend to look worst at the end of a long stretch of narrow leadership and best in the period immediately after that leadership breaks. An investor choosing RSPS today is, whether they frame it that way or not, taking a position that the sector's return concentration is closer to its end than its beginning.

Where the two funds closed on Friday

Both funds finished the Aug. 21, 2026 session higher, and by nearly identical margins. RSPS last traded at 31.67, up 0.83% on the day from a prior close of 31.41, with a day range of 31.46 to 31.71. XLP closed at 85.99, up 0.79% from 85.32, having traded between 85.28 and 86.01 — finishing within a few cents of its session high.

The near-match in daily moves is itself informative. Over a single session, the weighting scheme rarely matters much: staples names tend to move together on the same macro cues — input costs, consumer trade-down behavior, currency effects on overseas sales. The divergence compounds over years, not days, which is exactly why the five-year figure is the one that carries the argument.

For context on the tape that day, the S&P 500 tracker SPY closed at $765.72, up 0.41%; the Nasdaq 100 fund QQQ finished at $713.44, up 0.35%; and the Dow tracker DIA ended at $532.22, up 0.89%. Both staples funds outpaced the broad-market and tech benchmarks on the session and sat between them and the Dow — a reminder that defensive sectors do not always lag on up days.

The questions a buyer should ask before choosing

Performance history is the easiest input to find and the least reliable to extrapolate. A few other considerations deserve more weight than they usually get:

• How much single-name exposure can you tolerate? In a cap-weighted staples fund, a handful of holdings can drive most of the outcome. If one of them stumbles on a guidance cut or a margin miss, the fund feels it. Equal weighting dilutes that.
• What is the fund's role in your portfolio? Staples are usually held as ballast — a defensive allocation meant to hold up when cyclicals crack. Judged on that job, concentration is a liability, not a feature.
• Rebalancing has costs. Equal-weight funds trade more, because holding weights steady requires selling winners and buying laggards on a schedule. That turnover shows up in expenses and, in a taxable account, potentially in distributions.
• Do you already own the mega-caps? A broad S&P 500 holding already gives you the largest staples companies at their cap weight. Layering XLP on top doubles down on the same names; RSPS adds something the core index underweights.

What to watch from here

The variable that decides whether the next five years look like the last five is market breadth. If returns within consumer staples keep concentrating in the sector's biggest companies, XLP's structural advantage persists mechanically — no manager skill required. If the field broadens, RSPS's rebalancing discipline starts working in its favor, buying the laggards before they recover rather than after.

Watch the relative spread between the two funds over the coming quarters rather than either one in isolation. A narrowing gap is the earliest signal that leadership inside staples is rotating. Watch, too, how the sector behaves relative to the broad market: staples usually earn their keep in drawdowns, and the composition of any such move — whether the giants or the mid-caps do the defending — will tell you which weighting scheme is being rewarded.

The honest answer to "which is the better buy" is that they solve different problems. One maximizes exposure to the sector's proven winners. The other insures against depending on them. The 22% gap is the price of that insurance so far.

Key facts

• XLP last close: 85.99, +0.79% (Aug. 21, 2026, 20:00 GMT)
• RSPS last close: 31.67, +0.83% (Aug. 21, 2026, 20:00 GMT)
• Five-year performance gap: XLP's gains 22% stronger than RSPS
• Weighting methods: XLP market-cap weighted; RSPS equal weighted

Frequently asked questions

What is the main difference between RSPS and XLP?

XLP, State Street's consumer staples ETF, weights holdings by market capitalization, so the sector's largest companies take the biggest positions. Invesco's RSPS assigns each holding an equal target weight regardless of company size and rebalances periodically back to that target, producing more balanced exposure and a tilt toward smaller sector members.

How much better has XLP performed?

According to a comparison published by Motley Fool on Aug. 22, 2026, State Street's market-cap approach in XLP delivered five-year gains 22% stronger than Invesco's equal-weight RSPS. That gap reflects a period in which the sector's largest companies drove a disproportionate share of returns, which favors cap weighting mechanically.

Where did the two funds last close?

As of the last trade on Aug. 21, 2026 at 20:00 GMT, RSPS closed at 31.67, up 0.83% from a prior close of 31.41, with a day range of 31.46 to 31.71. XLP closed at 85.99, up 0.79% from 85.32, trading between 85.28 and 86.01 during the session.

Does equal weighting ever outperform?

Equal-weight strategies typically lag during stretches when a narrow group of very large companies drives sector or index returns, and tend to do relatively better once that leadership broadens out. Because equal-weight funds systematically trim winners and add to laggards, they benefit when previously underperforming holdings recover.

Why do investors hold consumer staples ETFs at all?

Consumer staples companies sell food, beverages, household and personal-care products whose demand is relatively steady across economic cycles. Investors typically hold the sector as defensive ballast — an allocation expected to hold value better than cyclical sectors during market drawdowns, rather than as a source of high growth.

Does an equal-weight fund cost more to own?

Equal-weight funds generally trade more than cap-weighted ones, because maintaining equal target weights requires selling holdings that have appreciated and buying those that have lagged on a set rebalancing schedule. That turnover can raise costs and, in a taxable account, may increase capital gains distributions relative to a lower-turnover cap-weighted fund.

Sources

• Which Consumer Staples ETF Is a Better Buy: Invesco's RSPS or SPDR's XLP? — Motley Fool

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