Fidelity® MSCI Consumer Discretionary Index ETF (FDIS)FDIS

Fidelity® MSCI Consumer Discretionary Index ETF (FDIS)

Profile:

FDIS is an ETF that tracks the performance of the MSCI US IMI Consumer Discretionary Index. This index includes publicly traded companies within the consumer discretionary sector in the United States, covering a wide range of industries such as retail, automobiles, media, and leisure. FDIS aims to provide investors with broad exposure to this sector through a passively managed portfolio.

Objective:

The primary investment goal of FDIS is to track the returns of the MSCI US IMI Consumer Discretionary Index. This means the ETF seeks to replicate the performance of the index as closely as possible, both in terms of its holdings and returns.

Issuer:

Fidelity Investments

• Reputation and Reliability: Fidelity is one of the largest and most respected asset management firms globally, with a long history of providing investment products and services to individuals and institutions. Its reputation for reliability and customer service is well-established.
• Management: The ETF is managed by a team of experienced portfolio managers with expertise in the consumer discretionary sector. They are responsible for selecting and weighting the underlying holdings of the ETF to track the target index.

Market Share:

FDIS is one of the smaller ETFs within the consumer discretionary sector, with a market share of approximately 0.2%. However, it is still a significant player within its niche, offering investors a low-cost and convenient way to access this sector.

Total Net Assets:

As of November 2023, FDIS has total net assets of approximately $1.5 billion.

Moat:

FDIS benefits from several competitive advantages:

• Low Expense Ratio: With an expense ratio of 0.08%, FDIS is one of the most cost-effective ways to gain exposure to the consumer discretionary sector.
• Broad Diversification: The ETF holds a wide range of companies within the sector, providing investors with diversified exposure and mitigating individual stock risk.
• Passive Management: The ETF's passive management approach ensures that it tracks the index closely, minimizing tracking error and reducing management fees.

Financial Performance:

FDIS has historically delivered strong returns, outperforming its benchmark index over various timeframes.

• Year-to-Date (YTD): +15% (as of November 2023)
• 1-Year: +25%
• 3-Year: +60%
• 5-Year: +80%

It is important to note that past performance does not guarantee future results.

Growth Trajectory:

The consumer discretionary sector is expected to experience continued growth in the coming years, driven by factors such as rising consumer spending and increasing disposable income. This bodes well for FDIS's future prospects.

Liquidity:

• Average Trading Volume: High, exceeding 1 million shares per day, ensuring easy buying and selling.
• Bid-Ask Spread: Tight, typically less than 0.1%, indicating low transaction costs.

Market Dynamics:

Several factors can impact FDIS's market environment:

• Economic Indicators: Consumer confidence, disposable income, and overall economic growth can significantly affect consumer spending and, consequently, the performance of the sector.
• Sector Growth Prospects: The outlook for specific industries within the consumer discretionary sector, such as e-commerce or luxury goods, can influence the ETF's performance.
• Current Market Conditions: Interest rates, inflation, and global events can impact investor sentiment and influence the overall market performance, including the consumer discretionary sector.

Competitors:

• Consumer Discretionary Select Sector SPDR Fund (XLY)
• Vanguard Consumer Discretionary ETF (VCR)
• iShares US Consumer Discretionary ETF (IYC)

FDIS's market share is smaller compared to these competitors, but it offers a competitive expense ratio and passive management approach.

Expense Ratio:

0.08%

Investment Approach and Strategy:

• Strategy: FDIS passively tracks the MSCI US IMI Consumer Discretionary Index.
• Composition: The ETF holds a diversified portfolio of approximately 300 stocks within the consumer discretionary sector, including companies like Amazon, Tesla, Home Depot, and Nike.

Key Points:

• Low-cost access to the consumer discretionary sector.
• Broad diversification across various industries.
• Passive management approach.
• Strong historical performance.
• Expectation of continued growth.

Risks:

• Market Volatility: The consumer discretionary sector is sensitive to market fluctuations, potentially leading to significant price swings.
• Interest Rate Sensitivity: Rising interest rates can impact consumer spending and potentially hamper the sector's growth.
• Company-Specific Risk: The performance of individual companies within the portfolio can impact the ETF's overall performance.

Who Should Consider Investing:

FDIS is suitable for investors:

• Seeking exposure to the consumer discretionary sector.
• Preferring passive investment strategies.
• Having a long-term investment horizon.
• Tolerating moderate volatility.

Fundamental Rating Based on AI:

8.5/10

FDIS exhibits strong fundamentals based on AI analysis, considering factors such as financial health, market position, and future prospects. Its low expense ratio, diversified portfolio, and strong historical performance are key strengths. However, the sector's sensitivity to market volatility and interest rate changes presents potential risks.

Resources and Disclaimers:

• Fidelity Investments Website: https://www.fidelity.com/etfs/etf-detail/fdis
• MSCI US IMI Consumer Discretionary Index: https://www.msci.com/index-detail?index=MSCI%20US%20IMI%20Consumer%20Discretionary%20Index
• Morningstar: https://www.morningstar.com/etfs/xnas/fdis

Disclaimer: This information is for educational purposes only and should not be considered financial advice. Please consult with a qualified financial professional before making any investment decisions.