Should You Invest in the Fidelity MSCI Consumer Discretionary Index ETF (FDIS)?
The Fidelity MSCI Consumer Discretionary Index ETF (FDIS) was launched on 10/21/2013, and is a passively managed exchange traded fund designed to offer broad exposure to the Consumer Discretionary - Broad segment of the equity market.
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also 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 15, placing it in bottom 6%.
The fund is sponsored by Fidelity. It has amassed assets over $859.40 million, 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.
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain 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 0.91%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Consumer Discretionary sector--about 98.80% of the portfolio.
Looking at individual holdings, Amazon.com Inc (AMZN) accounts for about 36.31% of total assets, followed by Home Depot Inc (HD) and Tesla Inc (TSLA).
The top 10 holdings account for about 66.31% of total assets under management.
Performance and Risk
The ETF has gained about 16.90% so far this year and it's up approximately 20.01% in the last one year (as of 07/24/2020). In that past 52-week period, it has traded between $33.25 and $57.37.
The ETF has a beta of 1.20 and standard deviation of 23.40% for the trailing three-year period, making it a medium risk choice in the space. With about 262 holdings, it effectively diversifies company-specific risk.
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 good 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 ETF (XLY) tracks Consumer Discretionary Select Sector Index. Vanguard Consumer Discretionary ETF has $3.31 billion in assets, Consumer Discretionary Select Sector SPDR ETF has $14.42 billion. 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
The Home Depot, Inc. (HD): Free Stock Analysis Report
Amazon.com, Inc. (AMZN): Free Stock Analysis Report
Tesla, Inc. (TSLA): Free Stock Analysis Report
Vanguard Consumer Discretionary ETF (VCR): ETF Research Reports
Consumer Discretionary Select Sector SPDR ETF (XLY): 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.