VDC vs. FSTA: A Tale of Two ETFs

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The Vanguard Consumer Staples ETF (VDC) (VDC 0.52%) and the Fidelity MSCI Consumer Staples Index ETF (FSTA) (FSTA 0.48%) both target U.S. consumer staples, but VDC stands out for its much larger assets under management (AUM) and longer track record. (Imagine if you had to choose between two identical twins, but one has a slightly different birthmark. That’s the difference here, but who’s counting?)

Both funds aim to capture the U.S. consumer staples sector, making them potential core options for those seeking defensive equity exposure. This comparison looks at how FSTA measures up to VDC across cost, performance, risk, liquidity, and portfolio construction. (Or, as the ancient Romans might have said, “Which chariot is faster? Both are made of wood.”)

The Great ETF Conundrum: Cost & Size

Metric FSTA VDC
Issuer Fidelity Vanguard
Expense ratio 0.08% 0.09%
1-yr return (as of Dec. 12, 2025) (2.7%) (2.4%)
Dividend yield 2.2% 2.2%
Beta 0.56 0.56
AUM $1.3 billion $7.4 billion

Beta measures price volatility relative to the S&P 500; beta is calculated from five-year weekly returns. The 1-yr return represents total return over the trailing 12 months. (This is the financial equivalent of measuring the speed of a snail with a stopwatch. Useful? Perhaps. Meaningful? Probably not.)

FSTA is slightly more affordable by expense ratio, but the difference is only 0.01 percentage points. Dividend yields are identical, so cost and payout are essentially a wash between the two. (It’s like choosing between two identical sandwiches. One has a slightly better mustard, but no one really cares.)

Performance & Risk: The Battle of the Boring

Metric FSTA VDC
Max drawdown (5 y) (17.08%) (16.54%)
Growth of $1,000 over 5 years $1,251 $1,252

Here, the funds are so similar they might be siblings separated at birth. (Or, as the poet W.H. Auden might have written, “Two funds, both alike in dignity, in fair VDC, where we lay our scene…”)

What’s Inside: A Stock Portfolio’s Inner Life

VDC holds 107 stocks focused almost entirely on consumer defensive companies, with a tiny allocation to consumer cyclicals and industrials. Its top three holdings are Walmart (WMT 0.41%), Costco Wholesale (COST 0.23%), and Procter & Gamble (PG 0.73%), which together make up a significant portion of the portfolio. The fund has been operating for nearly 22 years, giving it a long track record, and it manages $8.3 billion in assets under management (AUM). (This is the financial equivalent of a well-worn book: familiar, reliable, and slightly frayed at the edges.)

FSTA offers nearly identical sector exposure, with 98% in consumer defensive stocks and similar top holdings: Costco Wholesale, Walmart, and The Procter & Gamble. It holds 95 stocks and tracks the MSCI USA IMI Consumer Staples 25/50 Index. Both funds avoid quirks like leverage or ESG overlays. (Because nothing says “innovation” like avoiding novelty.)

For more guidance on ETF investing, check out the full guide at this link. (Or don’t. The universe has a way of sorting itself out, eventually.)

The Investor’s Dilemma: A Question of Slight Differences

Let’s cut to the chase: These two exchange-traded funds are similar very similar. In fact, there are few meaningful differences between the two. For example, let’s consider some of the key features of any ETF:

  • Dividend yield – Both funds sport a dividend yield of 2.2%. (A level of consistency so profound, it’s almost poetic.)
  • Recent performance – Both funds have delivered roughly the same return over the last year approximately -2.5%. On a longer time horizon dating back to FSTA’s inception in 2013, FSTA has delivered a compound annual growth rate (CAGR) of 8.5% and VDC has a CAGR of 8.7%. (A difference so small, it’s like arguing about the exact shade of gray in a cloud.)
  • Both funds have similar top holdings of iconic consumer staples companies like Walmart, Costco, and Procter & Gamble. (The financial equivalent of a well-rehearsed play: everyone knows the lines, and no one is surprised.)

Indeed, the funds are so similar, identifying any differences may seem like splitting hairs. However, there are a few worth noting. (Or, as the philosopher Kierkegaard might have said, “Life can only be understood backwards, but it must be lived forwards. Which is why we’re here, staring at ETFs.”)

For example, which each fund has a low expense ratio, but VDC is slightly lower at 0.08. FSTA’s expense ratio is 0.09%.

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Two other differences are time since inception and AUM. VDC was started in 2004, while FSTA began in 2013, giving VDC a leg up when comparing historical returns. Finally, VDC has a larger AUM with $7.4 billion versus $1.4 billion for FSTA. Both figures are high enough that liquidity shouldn’t be an issue for investors. (But what is “enough”? The answer, of course, is “more than you need.”)

A Dictionary of Financial Nonsense

ETF: Exchange-Traded Fund; a fund that trades on stock exchanges like a stock and holds a basket of assets. (Like a bag of chips, but with more spreadsheets.)
Consumer staples sector: Industry segment focused on essential products such as food, beverages, and household goods. (The only thing more essential than these products is the desire to buy them.)
Expense ratio: The annual fee, as a percentage of assets, that a fund charges to cover operating costs. (A tax on your money, but with more jargon.)
Dividend yield: Annual dividends paid by a fund or stock divided by its current price, expressed as a percentage. (A measure of how much your money is paying you, if you’re lucky.)
Beta: A measure of an investment’s volatility compared to the overall market, often using the S&P 500 as a benchmark. (Like a weather forecast, but for stocks.)
AUM: Assets Under Management; the total market value of assets a fund manages on behalf of investors. (The financial equivalent of a party where everyone’s invited, but only the rich get to bring snacks.)
Max drawdown: The largest percentage drop from a fund’s peak value to its lowest point over a specific period. (The financial equivalent of a bad day, but with more graphs.)
Defensive equity exposure: Investing in stocks or funds less sensitive to economic cycles, aiming for stability during downturns. (Like wearing a helmet in a hurricane. Practical, but not particularly glamorous.)
Portfolio construction: The process of selecting and weighting assets within a fund or investment portfolio. (The art of saying “I’m not sure, but I’ll pretend I am.”)
Track record: The historical performance and operational history of a fund or investment product. (A resume, but for money.)
Index: A benchmark that tracks the performance of a group of securities, often used as a standard for funds. (Like a report card, but for markets.)

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2025-12-21 07:06