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Should You Invest in the Fidelity MSCI Consumer Staples Index ETF (FSTA)?

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 13, placing it in bottom 19%.

Index Details

The fund is sponsored by Fidelity. It has amassed assets over $525.64 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.

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 2.65%.

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 Staples sector--about 100% of the portfolio.

Looking at individual holdings, Procter + Gamble Co/the (PG) accounts for about 12.63% of total assets, followed by Coca Cola Co/the (KO) and Pepsico Inc (PEP).

The top 10 holdings account for about 68.35% of total assets under management.

Performance and Risk

Year-to-date, the Fidelity MSCI Consumer Staples Index ETF has lost about -0.43% so far, and is up about 3.40% over the last 12 months (as of 11/29/2018). FSTA has traded between $29.61 and $35.42 in this past 52-week period.

The ETF has a beta of 0.58 and standard deviation of 11.21% for the trailing three-year period, making it a medium risk choice in the space. With about 92 holdings, it effectively diversifies company-specific risk.

Alternatives

Fidelity MSCI Consumer Staples Index ETF sports a Zacks ETF Rank of 4 (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 Fund (XLP) tracks Consumer Staples Select Sector Index. Vanguard Consumer Staples ETF has $4.30 B in assets, Consumer Staples Select Sector SPDR Fund has $9.72 B. 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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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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