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

Sweta Killa
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Looking for broad exposure to the Consumer Staples - Broad segment of the U.S. equity market? You should consider the Fidelity MSCI Consumer Staples Index ETF (FSTA), 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 $245.52 M, making it one of the average sized ETFs attempting to match the performance of the Consumer Staples - Broad segment of the U.S. 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 3.02%.

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 96.40% of the portfolio.

Looking at individual holdings, Procter + Gamble Co/the (PG) accounts for about 10.23% of total assets, followed by Coca Cola Co/the (KO) and Pepsico Inc (PEP).

The top 10 holdings account for about 63.09% of total assets under management.

Performance and Risk

The ETF has lost about -12.59% and is down about -7.55% so far this year and in the past one year (as of 05/09/2018), respectively. FSTA has traded between $29.61 and $35.42 during this last 52-week period.

The ETF has a beta of 0.70 and standard deviation of 11.78% for the trailing three-year period, making it a medium risk choice in the space. With about 99 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. 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 $3.45 B in assets, Consumer Staples Select Sector SPDR Fund has $7.42 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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Coca-Cola Company (The) (KO) : Free Stock Analysis Report
 
Pepsico, Inc. (PEP) : Free Stock Analysis Report
 
SPDR-CONS STPL (XLP): ETF Research Reports
 
VIPERS-CONS STA (VDC): ETF Research Reports
 
FID-STAPLES (FSTA): ETF Research Reports
 
Procter & Gamble Company (The) (PG) : Free Stock Analysis Report
 
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