Consumer Staples ETF XLP offers a stable hedge against tech sell-offs with steady dividends and defensive stocks.

The Consumer Staples Select Sector SPDR Fund (XLP) provides a defensive investment option for portfolios heavily weighted in AI and tech stocks. XLP holds major consumer staples companies like Walmart, Costco, and Coca-Cola, which have shown resilience during market downturns, including the COVID crash in 2020 and the tech sell-off in 2021-2022. While it offers a modest 2.57% dividend yield and low fees, it trades at higher valuations and faces sector-specific risks. XLP is best used as a 5-15% portfolio sleeve to reduce volatility rather than as a full replacement for growth-focused tech investments.