Procter & Gamble ( PG) fell 3.5% early today, dragging Consumer Staples Select Sector SPDR ( XLP) down 1.16% with it. P&G's slide comes in the wake of a fiscal fourth-quarter earnings drop of 18% from the previous year. Revenue in the fourth quarter fell 2.23% from the year before.This moment is a teachable one for ETF investors who flock to funds like XLP to avoid security-specific risk. P&G accounts for more than 16% of XLP's assets, an allocation that will surely sway the ETF. Capitalization-weighted strategies, favored by issuers like State Street ( STT) and i Shares, can often overweight top components when executing their strategies. XLP's portfolio has 42 holdings, but 66% of the fund's assets are concentrated in the fund's top 10 components. While investors are more diversified buying XLP than picking just a couple of consumer names, they will still be particularly vulnerable to the movements of a few key components. The other risk inherent in buying a cap-weighted strategy like XLP is unintended overexposure on a broader scale. The top five components of XLP -- P&G, Wal-Mart ( WMT), Philip Morris ( PM), Coca-Cola ( KO) and CVS ( CVS) -- are large companies that an investor might own individually or in other parts of their broader portfolio strategy. Alternatives to the cap-heavy strategy offered by XLP include PowerShares Dynamic Consumer Staples ETF ( PSL) and Rydex S&P Equal Weight Consumer Staples ETF ( RHS) have not gained much traction. PSL uses investment merit criteria, including fundamental growth, stock valuation, investments and risk factors to balance its portfolio. PSL allocates just 25% of its assets to the top 10 holdings. The downside to this fund is low trading volume, with average daily trading volume at barely 10,000 shares. Investors are best off buying PSL slowly and holding it over the long term. RHS has an average daily trading volume of less than 2,000. Adding XLP to existing positions in companies like Wal-Mart will concentrate an individual portfolio, potentially providing more exposure to a given security than the investors originally bargained for. Investors looking to add large, cap-weighted strategies like XLP to their investments should first check their existing holdings to look for overlap.