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

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Launched on 10/21/2013, the Fidelity MSCI Consumer Discretionary Index ETF (FDIS) is a passively managed exchange traded fund designed to provide a broad exposure to the Consumer Discretionary - Broad segment of the U.S. equity market.

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 11, placing it in bottom 31%.

Index Details

The fund is sponsored by Fidelity. It has amassed assets over $508.78 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

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 0.95%.

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 18.57% of total assets, followed by Home Depot Inc (HD) and Netflix Inc (NFLX).

The top 10 holdings account for about 49.49% of total assets under management.

Performance and Risk

Year-to-date, the Fidelity MSCI Consumer Discretionary Index ETF return is roughly 10.97% so far, and was up about 22.58% over the last 12 months (as of 06/12/2018). FDIS has traded between $34.83 and $43.30 in this past 52-week period.

The ETF has a beta of 1.12 and standard deviation of 13.97% for the trailing three-year period, making it a medium risk choice in the space. With about 353 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 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 Fund (XLY) tracks Consumer Discretionary Select Sector Index. Vanguard Consumer Discretionary ETF has $2.77 B in assets, Consumer Discretionary Select Sector SPDR Fund has $13.74 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.


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FID-CON DIS (FDIS): ETF Research Reports
 
Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
 
Netflix, Inc. (NFLX) : Free Stock Analysis Report
 
The Home Depot, Inc. (HD) : Free Stock Analysis Report
 
SPDR-CONS DISCR (XLY): ETF Research Reports
 
VIPERS-CONS DIS (VCR): ETF Research Reports
 
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