Should You Invest in the Fidelity MSCI Consumer Discretionary Index ETF (FDIS)?
Designed to provide broad exposure to the Consumer Discretionary - Broad segment of the equity market, the Fidelity MSCI Consumer Discretionary Index ETF (FDIS) is a passively managed exchange traded fund launched on 10/21/2013.
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
Sector ETFs also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. 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%.
The fund is sponsored by Fidelity. It has amassed assets over $692.20 M, making it one of the larger ETFs attempting to match the performance of the Consumer Discretionary - Broad segment of the 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.
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
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 1.14%.
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 99.10% of the portfolio.
Looking at individual holdings, Amazon.com Inc (AMZN) accounts for about 24.66% of total assets, followed by Home Depot Inc (HD) and Mcdonald S Corp (MCD).
The top 10 holdings account for about 54.65% of total assets under management.
Performance and Risk
So far this year, FDIS has added about 18.81%, and was up about 4.47% in the last one year (as of 06/17/2019). During this past 52-week period, the fund has traded between $35.51 and $46.45.
The ETF has a beta of 1.11 and standard deviation of 14.48% for the trailing three-year period, making it a medium risk choice in the space. With about 300 holdings, it effectively diversifies company-specific risk.
Fidelity MSCI Consumer Discretionary Index ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, FDIS is a great option for investors seeking exposure to the Consumer Discretionary ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
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 $3.08 B in assets, Consumer Discretionary Select Sector SPDR Fund has $13.69 B. VCR has an expense ratio of 0.10% and XLY charges 0.13%.
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.
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Fidelity MSCI Consumer Discretionary Index ETF (FDIS): ETF Research Reports
Amazon.com, Inc. (AMZN): Free Stock Analysis Report
The Home Depot, Inc. (HD): Free Stock Analysis Report
Consumer Discretionary Select Sector SPDR Fund (XLY): ETF Research Reports
Vanguard Consumer Discretionary ETF (VCR): ETF Research Reports
McDonald's Corporation (MCD): Free Stock Analysis Report
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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.