Back to top

Image: Bigstock

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

Read MoreHide Full Article

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.

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 6, placing it in top 38%.

Index Details

The fund is sponsored by Fidelity. It has amassed assets over $1.58 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.

Costs

When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.

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 0.55%.

Sector Exposure and Top Holdings

It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. 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 98.40% of the portfolio.

Looking at individual holdings, Amazon.com Inc Common Stock Usd.01 (AMZN - Free Report) accounts for about 23.97% 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 56.69% of total assets under management.

Performance and Risk

So far this year, FDIS has added about 14.96%, and it's up approximately 34.76% in the last one year (as of 09/21/2021). During this past 52-week period, the fund has traded between $59.50 and $83.37.

The ETF has a beta of 1.25 and standard deviation of 24.94% for the trailing three-year period, making it a medium risk choice in the space. With about 302 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 excellent 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 $6.55 billion in assets, Consumer Discretionary Select Sector SPDR ETF has $19.49 billion. VCR has an expense ratio of 0.10% and XLY charges 0.12%.

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.

Published in