Should You Invest in the Fidelity MSCI Consumer Discretionary Index ETF (FDIS)?
Designed to provide broad exposure to the Consumer Discretionary - Broad segment of the equity market, the Fidelity MSCI Consumer Discretionary Index ETF (FDIS) 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.
Investor-friendly, sector ETFs provide many options 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 12, placing it in bottom 25%.
Index Details
The fund is sponsored by Fidelity. It has amassed assets over $1.37 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
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 0.59%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. 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 98.60% of the portfolio.
Looking at individual holdings, Amazon.com Inc Common Stock Usd.01 (AMZN) accounts for about 21.07% of total assets, followed by Tesla Inc Common Stock Usd.001 (TSLA) and Home Depot Inc Common Stock Usd.05 (HD).
The top 10 holdings account for about 56.63% of total assets under management.
Performance and Risk
So far this year, FDIS has gained about 1.77%, and it's up approximately 59.41% in the last one year (as of 03/08/2021). During this past 52-week period, the fund has traded between $33.25 and $77.85.
The ETF has a beta of 1.25 and standard deviation of 24.68% for the trailing three-year period, making it a medium risk choice in the space. With about 276 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) tracks MSCI US Investable Market Consumer Discretionary 25/50 Index and the Consumer Discretionary Select Sector SPDR ETF (XLY) tracks Consumer Discretionary Select Sector Index. Vanguard Consumer Discretionary ETF has $5 billion in assets, Consumer Discretionary Select Sector SPDR ETF has $18.17 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.
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The Home Depot, Inc. (HD) : Free Stock Analysis Report
Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
Consumer Discretionary Select Sector SPDR ETF (XLY): ETF Research Reports
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