Exploring the Fidelity MSCI Consumer Discretionary Index ETF
Diving into the Fidelity MSCI Consumer Discretionary Index ETF
Launched in 2013, the Fidelity MSCI Consumer Discretionary Index ETF (FDIS) has quickly become a favored choice for many investors. As a passively managed exchange-traded fund (ETF), it aims to provide broad exposure to the Consumer Discretionary - Broad segment of the equity market, allowing investors to tap into this dynamic sector.
The appeal of this ETF lies in its cost-effectiveness, transparency, and tax efficiency. It is designed with both retail and institutional investors in mind, making it an optimal choice for those planning for long-term growth. Offering low costs and a streamlined investment approach, FDIS is geared towards simplifying the investment process for its holders.
Understanding Index Details
The fund, sponsored by Fidelity, has amassed over $1.70 billion in assets, positioning it among the top ETFs in the consumer discretionary category. Its goal is to mirror the performance of the MSCI USA IMI Consumer Discretionary Index before considering fees and expenses.
This benchmark index reflects how the consumer discretionary sector is performing within the U.S. equity market, thereby offering investors a real-time gauge of this sector's health. As market trends shift, investors may find this ETF to be a timely and relevant option.
Analyzing Costs
When selecting an ETF, the cost is a crucial consideration. FDIS stands out with its annual operating expenses set at just 0.08%, making it one of the cheapest options available. This lower cost can potentially enable a stronger performance compared to higher-cost alternatives, assuming that other fundamental factors remain constant.
Furthermore, FDIS boasts a 12-month trailing dividend yield of 0.58%, which could be an attractive feature for dividend-focused investors looking for passive income streams.
Sector Exposure and Key Holdings
Diversity is a major advantage of ETFs, and FDIS is no exception, offering nearly 100% allocation in the Consumer Discretionary sector. Delving into the individual holdings can provide crucial insights for prospective investors.
Amazon.com Inc emerges as the dominant player, comprising roughly 20.67% of total assets. Other notable holdings include Tesla Inc and Home Depot Inc (HD). Together, the top ten assets account for around 55.60% of the total assets under management, illustrating significant concentration in leading companies.
Performance and Risk Considerations
In terms of performance, FDIS shows promising returns, with an approximate 8.30% gain so far this year and about a 15.69% increase over the previous twelve months. The recent trading range has been between $64.24 and $86.11, indicating some stability in its price action.
With a beta of 1.28 and a standard deviation of 25.14% over the trailing three-year period, this ETF presents a medium risk profile. With approximately 275 holdings, FDIS significantly reduces the risks associated with individual stocks.
Exploring Alternatives
Fidelity MSCI Consumer Discretionary Index ETF holds a Zacks ETF Rank of 3 (Hold), based on various factors including projected returns and expense ratio. Investors looking for exposure to consumer discretionary assets have options with this ETF.
Vanguard Consumer Discretionary ETF (VCR) and the Consumer Discretionary Select Sector SPDR ETF (XLY) are noteworthy alternatives. VCR tracks the MSCI US Investable Market Consumer Discretionary 25/50 Index, while XLY follows the Consumer Discretionary Select Sector Index. VCR has a total of $5.67 billion in assets, whereas XLY leads the pack with $18.49 billion. Notably, VCR maintains an expense ratio of 0.10%, while XLY’s expense ratio is slightly lower at 0.09%.
Frequently Asked Questions
What is the objective of the Fidelity MSCI Consumer Discretionary Index ETF?
The ETF aims to provide broad exposure to the Consumer Discretionary sector, aiming to match the performance of the MSCI USA IMI Consumer Discretionary Index.
What are the costs associated with investing in this ETF?
FDIS features a low operating expense ratio of 0.08% and a 12-month trailing dividend yield of 0.58%.
Who are the top holdings in this ETF?
Amazon.com Inc, Tesla Inc, and Home Depot Inc are among the top holdings, with Amazon comprising about 20.67% of total assets.
What is the recent performance of the ETF?
As of recent assessments, FDIS has gained about 8.30% this year and has appreciated approximately 15.69% over the past year.
Are there alternative ETFs similar to FDIS?
Yes, alternatives include the Vanguard Consumer Discretionary ETF (VCR) and Consumer Discretionary Select Sector SPDR ETF (XLY), which also offer exposure to the same sector.
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Disclaimer: The content of this article is solely for general informational purposes only; it does not represent legal, financial, or investment advice. Investors Hangout does not offer financial advice; the author is not a licensed financial advisor. Consult a qualified advisor before making any financial or investment decisions based on this article. The author's interpretation of publicly available data shapes the opinions presented here; as a result, they should not be taken as advice to purchase, sell, or hold any securities mentioned or any other investments. The author does not guarantee the accuracy, completeness, or timeliness of any material, providing it "as is." Information and market conditions may change; past performance is not indicative of future outcomes. If any of the material offered here is inaccurate, please contact us for corrections.
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