Fidelity MSCI Consumer Discretionary Index ETF

FDIS

Market cap $1.8B

Consumer services is the most compelling consumer discretionary subsector, showing significant undervaluation and excellent quality versus 11-year historical baselines. FDIS offers broad exposure to the sector with 249 stocks and is cheaper than XLY on valuation metrics, but both funds are highly concentrated in Amazon and Tesla. FDIS and XLY have near-identical risk-adjusted performance and expense ratios; XLY's higher liquidity favors traders, while FDIS suits long-term investors seeking value.

Consumer discretionary names live or die on whether households feel comfortable opening their wallets, and right now those signals are flashing in opposite directions.

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Launched on October 21, 2013, the Fidelity MSCI Consumer Discretionary Index ETF (FDIS) is a passively managed exchange traded fund designed to provide a broad exposure to the Consumer Discretionary - Broad segment of the equity market.

The latter half of the quarterly earnings season has been dominated by a heavy dose of retailer updates. Names reporting earnings include Walmart, Target, and other mainstay consumer discretionary retailers.

Consumer services are undervalued by 14% and exhibit excellent quality scores, while autos/components remain the most overpriced subsector with the lowest quality. FDIS and XLY offer equivalent long-term risk-adjusted returns; FDIS has better value, and XLY has higher liquidity; both are heavily concentrated in Amazon and Tesla. 10 stocks cheaper than their peers in February.

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 October 21, 2013.

The Fidelity MSCI Consumer Discretionary Index ETF ( NYSEARCA:FDIS ) isn't making headlines, and that's the point.

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