Should You Invest in the Fidelity MSCI Consumer Staples Index ETF (FSTA)?
The Fidelity MSCI Consumer Staples Index ETF (FSTA) was launched on 10/21/2013, and is a passively managed exchange traded fund designed to offer broad exposure to the Consumer Staples - Broad segment of the equity market.
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
Sector ETFs are also funds of convenience, offering many ways 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 4, placing it in top 25%.
Index Details
The fund is sponsored by Fidelity. It has amassed assets over $659.82 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.
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 2.67%.
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 Staples sector--about 100% of the portfolio.
Looking at individual holdings, Procter + Gamble Co/the (PG) accounts for about 14.90% of total assets, followed by Coca Cola Co/the (KO) and Pepsico Inc (PEP).
The top 10 holdings account for about 69.28% of total assets under management.
Performance and Risk
The ETF has lost about -8.79% and is up about 1.76% so far this year and in the past one year (as of 06/11/2020), respectively. FSTA has traded between $28.75 and $38.70 during this last 52-week period.
The ETF has a beta of 0.59 and standard deviation of 18.29% for the trailing three-year period, making it a medium risk choice in the space. With about 96 holdings, it effectively diversifies company-specific risk.
Alternatives
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 great choice for investors seeking exposure to the Consumer Staples ETFs segment of the market. Instead, 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 ETF (XLP) tracks Consumer Staples Select Sector Index. Vanguard Consumer Staples ETF has $5.37 billion in assets, Consumer Staples Select Sector SPDR ETF has $14.40 billion. VDC has an expense ratio of 0.10% and XLP 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 Staples Index ETF (FSTA): ETF Research Reports
CocaCola Company The (KO) : Free Stock Analysis Report
Procter Gamble Company The (PG) : Free Stock Analysis Report
PepsiCo, Inc. (PEP) : 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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