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Should You Invest in the Fidelity MSCI Consumer Discretionary Index ETF (FDIS)?

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Looking for broad exposure to the Consumer Discretionary - Broad segment of the U.S. equity market? You should consider the Fidelity MSCI Consumer Discretionary Index ETF (FDIS), a passively managed exchange traded fund launched on 10/21/2013.

While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.

Additionally, sector ETFs offer convenient ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Consumer Discretionary - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 8, placing it in top 50%.

Index Details

The fund is sponsored by Fidelity. It has amassed assets over $485.49 M, making it one of the larger ETFs attempting to match the performance of the Consumer Discretionary - Broad segment of the U.S. equity market. FDIS seeks to match the performance of the MSCI USA IMI Consumer Discretionary Index before fees and expenses.

MSCI USA IMI Consumer Discretionary Index represents the performance of the consumer discretionary sector in the U.S. equity market.

Costs

Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.

Annual operating expenses for this ETF are 0.08%, making it the least expensive product in the space.

It has a 12-month trailing dividend yield of 1.02%.

Sector Exposure and Top Holdings

ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.

This ETF has heaviest allocation in the Consumer Discretionary sector--about 100% of the portfolio.

Looking at individual holdings, Amazon.com Inc (AMZN) accounts for about 16.48% of total assets, followed by Home Depot Inc (HD) and Comcast Corp Class A (CMCSA).

The top 10 holdings account for about 48.25% of total assets under management.

Performance and Risk

The ETF has gained about 3.31% so far this year and is up about 16.62% in the last one year (as of 04/21/2018). In that past 52-week period, it has traded between $34.68 and $42.90.

The ETF has a beta of 1.12 and standard deviation of 13.94% for the trailing three-year period, making it a medium risk choice in the space. With about 354 holdings, it effectively diversifies company-specific risk.

Alternatives

Fidelity MSCI Consumer Discretionary Index ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, FDIS is a sufficient option for those seeking exposure to the Consumer Discretionary ETFs area of the market. Investors might also want to consider some other ETF options in the space.

Vanguard Consumer Discretionary ETF (VCR) tracks MSCI US Investable Market Consumer Discretionary 25/50 Index and the Consumer Discretionary Select Sector SPDR Fund (XLY) tracks Consumer Discretionary Select Sector Index. Vanguard Consumer Discretionary ETF has $2.58 B in assets, Consumer Discretionary Select Sector SPDR Fund has $13.31 B. VCR has an expense ratio of 0.10% and XLY charges 0.13%.

Bottom Line

To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center .

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Amazon.com, Inc. (AMZN): Free Stock Analysis Report

The Home Depot, Inc. (HD): Free Stock Analysis Report

Comcast Corporation (CMCSA): Free Stock Analysis Report

SPDR-CONS DISCR (XLY): ETF Research Reports

VIPERS-CONS DIS (VCR): ETF Research Reports

FID-CON DIS (FDIS): ETF Research Reports

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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