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

Sweta Killa

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.

While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.

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 11, placing it in bottom 31%.

Index Details

The fund is sponsored by Fidelity. It has amassed assets over $453.51 M, 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

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 2.83%.

Sector Exposure and Top Holdings

While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, 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 99.90% of the portfolio.

Looking at individual holdings, Procter + Gamble Co/the (PG) accounts for about 13.50% of total assets, followed by Coca Cola Co/the (KO) and Pepsico Inc (PEP).

The top 10 holdings account for about 68.88% of total assets under management.

Performance and Risk

The ETF has added about 6.59% and was up about 3.02% so far this year and in the past one year (as of 03/08/2019), respectively. FSTA has traded between $29.30 and $34.26 during this last 52-week period.

The ETF has a beta of 0.62 and standard deviation of 11.19% for the trailing three-year period, making it a medium risk choice in the space. With about 95 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 $4.57 B in assets, Consumer Staples Select Sector SPDR Fund has $10.23 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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Fidelity MSCI Consumer Staples Index ETF (FSTA): ETF Research Reports
 
Pepsico, Inc. (PEP) : Free Stock Analysis Report
 
Coca-Cola Company (The) (KO) : Free Stock Analysis Report
 
Consumer Staples Select Sector SPDR Fund (XLP): ETF Research Reports
 
Vanguard Consumer Staples ETF (VDC): ETF Research Reports
 
Procter & Gamble Company (The) (PG) : Free Stock Analysis Report
 
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