Should You Invest in the Fidelity MSCI Consumer Staples Index ETF (FSTA)?
Looking for broad exposure to the Consumer Staples - Broad segment of the equity market? You should consider the Fidelity MSCI Consumer Staples Index ETF (FSTA), a passively managed exchange traded fund launched on 10/21/2013.
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they 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 Staples - 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 $852.60 million, making it one of the larger ETFs attempting to match the performance of the Consumer Staples - Broad segment of the equity market. FSTA seeks to match the performance of the MSCI USA IMI Consumer Staples Index before fees and expenses.
MSCI USA IMI Consumer Staples Index represents the performance of the consumer staples 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 2.46%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Consumer Staples sector--about 100% of the portfolio.
Looking at individual holdings, Procter + Gamble Co/the (PG) accounts for about 16.11% of total assets, followed by Walmart Inc (WMT) and Coca Cola Co/the (KO).
The top 10 holdings account for about 69.40% of total assets under management.
Performance and Risk
The ETF return is roughly 5.66% and is up about 9.64% so far this year and in the past one year (as of 10/26/2020), respectively. FSTA has traded between $28.75 and $39.84 during this last 52-week period.
The ETF has a beta of 0.59 and standard deviation of 18.79% for the trailing three-year period, making it a medium risk choice in the space. With about 97 holdings, it effectively diversifies company-specific risk.
Fidelity MSCI Consumer Staples 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, FSTA is a reasonable option for those seeking exposure to the Consumer Staples ETFs area of the market. Investors might also want to consider some other ETF options in the space.
Vanguard Consumer Staples ETF (VDC) tracks MSCI US Investable Market Consumer Staples 25/50 Index and the Consumer Staples Select Sector SPDR ETF (XLP) tracks Consumer Staples Select Sector Index. Vanguard Consumer Staples ETF has $5.66 billion in assets, Consumer Staples Select Sector SPDR ETF has $13.84 billion. VDC has an expense ratio of 0.10% and XLP 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 Staples Index ETF (FSTA): ETF Research Reports
Walmart Inc. (WMT): Free Stock Analysis Report
CocaCola Company The (KO): Free Stock Analysis Report
Procter Gamble Company The (PG): Free Stock Analysis Report
Consumer Staples Select Sector SPDR ETF (XLP): ETF Research Reports
Vanguard Consumer Staples ETF (VDC): 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.