Designed to provide broad exposure to the Consumer Staples - Broad segment of the equity market, the Fidelity MSCI Consumer Staples Index ETF (FSTA - Free Report) is 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 also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. Consumer Staples - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 16, placing it in bottom 0%.
The fund is sponsored by Fidelity. It has amassed assets over $320.09 M, making it one of the average sized 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.
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 2.72%.
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 Staples sector--about 100% of the portfolio.
Looking at individual holdings, Procter + Gamble Co/the (PG - Free Report) accounts for about 11.36% of total assets, followed by Coca Cola Co/the (KO - Free Report) and Pepsico Inc (PEP - Free Report) .
The top 10 holdings account for about 66.59% of total assets under management.
Performance and Risk
Year-to-date, the Fidelity MSCI Consumer Staples Index ETF has lost about -4.90% so far, and is down about -0.13% over the last 12 months (as of 08/14/2018). FSTA has traded between $29.61 and $35.42 in this past 52-week period.
The ETF has a beta of 0.69 and standard deviation of 11.77% for the trailing three-year period, making it a medium risk choice in the space. With about 94 holdings, it effectively diversifies company-specific risk.
Fidelity MSCI Consumer Staples Index ETF sports a Zacks ETF Rank of 5 (Strong Sell), which is based on expected asset class return, expense ratio, and momentum, among other factors. FSTA, then, is not a suitable option 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 - Free Report) tracks MSCI US Investable Market Consumer Staples 25/50 Index and the Consumer Staples Select Sector SPDR Fund (XLP - Free Report) tracks Consumer Staples Select Sector Index. Vanguard Consumer Staples ETF has $3.94 B in assets, Consumer Staples Select Sector SPDR Fund has $9.23 B. VDC has an expense ratio of 0.10% and XLP charges 0.13%.
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