Fidelity® MSCI Consumer Discretionary Index ETF (FDIS)

ETF Fidelity® MSCI Consumer Discretionary Index ETF Summary

Profile:

• Focus: Tracks the performance of the MSCI US IMI Consumer Discretionary 25/50 Index, which includes large-, mid-, and small-cap stocks within the consumer discretionary sector.
• Asset Allocation: Primarily holds stocks in consumer discretionary companies located in the United States.
• Investment Strategy: Passively managed, seeks to replicate the performance of the benchmark index.

Objective:

• To provide investors with broad exposure to the US consumer discretionary sector and the potential for long-term capital appreciation.

Issuer:

• Fidelity Investments: A leading global financial services firm with a strong reputation and long track record in the market.
• Management: Experienced team with expertise in managing index funds and ETFs.

Market Share:

• Holds a significant market share within the US Consumer Discretionary ETF category.

Total Net Assets:

• As of November 7, 2023, the ETF has approximately $23.48 billion in assets under management.

Moat:

• Low expense ratio compared to other passively managed consumer discretionary ETFs.
• Strong brand recognition and reputation of the issuer.
• Tracks a broad and well-diversified benchmark index.

Financial Performance:

• Historically outperformed the S&P 500 Index over various timeframes, including a 3-year annualized return of 14.15% compared to 10.59% for the S&P 500 (as of November 7, 2023).
• Has consistently tracked its benchmark index closely with minimal tracking error.

Growth Trajectory:

• The US consumer discretionary sector is expected to continue growing due to rising consumer spending and ongoing innovation.
• The ETF is well-positioned to benefit from this growth trend.

Liquidity:

• Highly liquid with an average daily trading volume exceeding 1 million shares.
• Tight bid-ask spread ensures efficient buying and selling.

Market Dynamics:

• Economic growth and consumer confidence significantly impact the ETF's performance.
• Interest rate fluctuations and inflation can also affect consumer spending and, consequently, the ETF.

Competitors:

• iShares US Consumer Discretionary Sector ETF (XLY) (Market Share: 23.63%)
• Vanguard Consumer Discretionary ETF (VCR) (Market Share: 17.57%)

Expense Ratio:

• 0.08% per year, making it one of the lowest-cost consumer discretionary ETFs available.

Investment Approach and Strategy:

• Tracks the MSCI US IMI Consumer Discretionary 25/50 Index, offering broad exposure to the sector.
• Holds approximately 323 stocks as of November 7, 2023, including names like Amazon, Apple, Tesla, and Home Depot.

Key Points:

• Provides low-cost access to a diversified basket of US consumer discretionary stocks.
• Offers the potential for long-term capital appreciation.
• Has historically outperformed the S&P 500 Index.
• Highly liquid and trades with a tight bid-ask spread.

Risks:

• Volatility: Consumer discretionary stocks are known to be more volatile than the broader market.
• Market Risk: The ETF's performance is tied to the performance of the underlying companies within the sector.
• Sector Concentration Risk: Exclusive to the consumer discretionary sector, making it susceptible to sector-specific events.

Who Should Consider Investing:

• Investors seeking long-term exposure to the US consumer discretionary sector.
• Investors who believe the sector will outperform the broader market.
• Investors comfortable with moderate levels of volatility.
• Investors looking for a low-cost and well-diversified investment option within the sector.

Fundamental Rating Based on AI: (8.5 / 10)

The AI model assigns an 8.5 rating based on the ETF's strong financial performance, competitive expense ratio, and solid track record. The analysis indicates a positive growth trajectory for the consumer discretionary sector and considers Fidelity Investments' excellent reputation in the market. The rating acknowledges the limited diversification compared to broader market ETFs but highlights the low risk associated with the passive management strategy.

Resources and Disclaimers:

• Information sourced from Fidelity Investments website, ETF.com, and Yahoo Finance as of November 7, 2023.
• Past performance is not indicative of future results.
• This analysis is for informational purposes only and should not be considered investment advice. Always consult with a qualified financial advisor before making any investment decisions.