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 8, placing it in top 50%.
Index Details
The fund is sponsored by Fidelity. It has amassed assets over $646.50 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.
Costs
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are 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 1.33%.
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 99.10% of the portfolio.
Looking at individual holdings, Amazon.com Inc (AMZN) accounts for about 25.95% of total assets, followed by Home Depot Inc (HD) and Mcdonald S Corp (MCD).
The top 10 holdings account for about 57.89% of total assets under management.
Performance and Risk
The ETF has lost about -14.38% so far this year and is down about -1.69% in the last one year (as of 03/12/2020). In that past 52-week period, it has traded between $41.31 and $52.19.
The ETF has a beta of 1.05 and standard deviation of 16.49% for the trailing three-year period, making it a medium risk choice in the space. With about 291 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 ETF (XLY) tracks Consumer Discretionary Select Sector Index. Vanguard Consumer Discretionary ETF has $2.61 B in assets, Consumer Discretionary Select Sector SPDR ETF has $12.01 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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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
McDonald's Corporation (MCD) : 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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