If you're interested in broad exposure to the Consumer Discretionary - Broad segment of the equity market, look no further than the Fidelity MSCI Consumer Discretionary Index ETF (
FDIS Quick Quote FDIS - Free Report) , a passively managed exchange traded fund launched on 10/21/2013.
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.
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 13, placing it in bottom 19%.
The fund is sponsored by Fidelity. It has amassed assets over $1.36 billion, making it one of the larger 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.
MSCI USA IMI Consumer Discretionary Index represents the performance of the consumer discretionary sector in the U.S. equity market.
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain 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 0.56%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, 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 98.30% of the portfolio.
Looking at individual holdings, Amazon.com Inc (
AMZN Quick Quote AMZN - Free Report) accounts for about 32.30% of total assets, followed by Tesla Inc ( TSLA Quick Quote TSLA - Free Report) and Home Depot Inc ( HD Quick Quote HD - Free Report) .
The top 10 holdings account for about 65.37% of total assets under management.
Performance and Risk
The ETF has added about 7.50% so far this year and was up about 54.51% in the last one year (as of 01/21/2021). In that past 52-week period, it has traded between $33.25 and $75.95.
The ETF has a beta of 1.26 and standard deviation of 24.64% for the trailing three-year period, making it a medium risk choice in the space. With about 261 holdings, it effectively diversifies company-specific risk.
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 a great 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 Quick Quote VCR - Free Report) tracks MSCI US Investable Market Consumer Discretionary 25/50 Index and the Consumer Discretionary Select Sector SPDR ETF ( XLY Quick Quote XLY - Free Report) tracks Consumer Discretionary Select Sector Index. Vanguard Consumer Discretionary ETF has $5.06 billion in assets, Consumer Discretionary Select Sector SPDR ETF has $19.31 billion. VCR has an expense ratio of 0.10% and XLY 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.