Designed to provide broad exposure to the Consumer Staples - Broad segment of the equity market, the Fidelity MSCI Consumer Staples Index ETF (FSTA) is 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.
Investor-friendly, sector ETFs provide many options to gain low risk and diversified exposure to a broad group of companies in particular sectors. Consumer Staples - 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 $337.28 M, making it one of the average sized 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%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, 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 11.53% of total assets, followed by Coca Cola Co/the (KO) and Pepsico Inc (PEP).
The top 10 holdings account for about 66.34% of total assets under management.
Performance and Risk
Year-to-date, the Fidelity MSCI Consumer Staples Index ETF has lost about -1.81% so far, and it's up approximately 3.10% over the last 12 months (as of 09/18/2018). FSTA has traded between $29.61 and $35.42 in this past 52-week period.
The ETF has a beta of 0.68 and standard deviation of 11.15% for the trailing three-year period, making it a medium risk choice in the space. With about 94 holdings, it effectively diversifies company-specific risk.
Fidelity MSCI Consumer Staples Index ETF sports a Zacks ETF Rank of 5 (Strong Sell), which is based on expected asset class return, expense ratio, and momentum, among other factors. FSTA, then, is not a suitable option for investors seeking exposure to the Consumer Staples ETFs segment of the market. However, there are better ETFs in the space to consider.
Vanguard Consumer Staples ETF (VDC) tracks MSCI US Investable Market Consumer Staples 25/50 Index and the Consumer Staples Select Sector SPDR Fund (XLP) tracks Consumer Staples Select Sector Index. Vanguard Consumer Staples ETF has $4.08 B in assets, Consumer Staples Select Sector SPDR Fund has $9.78 B. 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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FID-STAPLES (FSTA): ETF Research Reports
Pepsico, Inc. (PEP) : Free Stock Analysis Report
Coca-Cola Company (The) (KO) : Free Stock Analysis Report
SPDR-CONS STPL (XLP): ETF Research Reports
VIPERS-CONS STA (VDC): ETF Research Reports
Procter & Gamble Company (The) (PG) : Free Stock Analysis Report
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