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Should You Invest in the Fidelity MSCI Consumer Discretionary Index ETF (FDIS)?

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Looking for broad exposure to the Consumer Discretionary - Broad segment of the equity market? You should consider the Fidelity MSCI Consumer Discretionary Index ETF (FDIS - Free Report) , 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.

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 Discretionary - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 15, placing it in bottom 6%.

Index Details

The fund is sponsored by Fidelity. It has amassed assets over $946.05 million, making it one of the largest ETFs attempting to match the performance of the Consumer Discretionary - Broad segment of the equity market. FDIS seeks to match the performance of the MSCI USA IMI Consumer Discretionary Index before fees and expenses.

The MSCI USA IMI Consumer Discretionary Index represents the performance of the consumer discretionary 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 0.99%.

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 Discretionary sector--about 100% of the portfolio.

Looking at individual holdings, Amazon.com Inc Common Stock Usd.01 (AMZN - Free Report) accounts for about 24.47% of total assets, followed by Tesla Inc Common Stock Usd.001 (TSLA - Free Report) and Home Depot Inc Common Stock Usd.05 (HD - Free Report) .

The top 10 holdings account for about 63.23% of total assets under management.

Performance and Risk

Year-to-date, the Fidelity MSCI Consumer Discretionary Index ETF has lost about -36.42% so far, and is down about -34.52% over the last 12 months (as of 12/27/2022). FDIS has traded between $56.47 and $90.25 in this past 52-week period.

The ETF has a beta of 1.22 and standard deviation of 30.15% for the trailing three-year period, making it a medium risk choice in the space. With about 331 holdings, it effectively diversifies company-specific risk.

Alternatives

Fidelity MSCI Consumer Discretionary Index ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, FDIS is an outstanding option for investors seeking exposure to the Consumer Discretionary ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.

Vanguard Consumer Discretionary ETF (VCR - Free Report) tracks MSCI US Investable Market Consumer Discretionary 25/50 Index and the Consumer Discretionary Select Sector SPDR ETF (XLY - Free Report) tracks Consumer Discretionary Select Sector Index. Vanguard Consumer Discretionary ETF has $3.88 billion in assets, Consumer Discretionary Select Sector SPDR ETF has $12.71 billion. VCR has an expense ratio of 0.10% and XLY charges 0.10%.

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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