Launched on 10/21/2013, the Fidelity MSCI Consumer Staples Index ETF (FSTA - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Consumer Staples - Broad segment of the equity market.
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
Additionally, sector ETFs offer convenient ways 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 13, placing it in bottom 19%.
The fund is sponsored by Fidelity. It has amassed assets over $503.09 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.
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are 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 2.61%.
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 100% of the portfolio.
Looking at individual holdings, Procter + Gamble Co/the (PG - Free Report) accounts for about 13.85% 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 68.55% of total assets under management.
Performance and Risk
The ETF return is roughly 14.56% so far this year and is up about 18.53% in the last one year (as of 05/17/2019). In that past 52-week period, it has traded between $29.30 and $34.72.
The ETF has a beta of 0.63 and standard deviation of 11.16% 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.
Fidelity MSCI Consumer Staples Index ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, FSTA is an excellent option for investors seeking exposure to the Consumer Staples ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
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 $4.90 B in assets, Consumer Staples Select Sector SPDR Fund has $11.61 B. VDC has an expense ratio of 0.10% and XLP charges 0.13%.
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.