Should You Invest in the Fidelity MSCI Consumer Staples Index ETF (FSTA)?

The Fidelity MSCI Consumer Staples Index ETF (FSTA), with $1.38 billion in assets, offers exposure to the U.S. consumer staples sector and seeks to mirror the MSCI USA IMI Consumer Staples Index. FSTA's expense ratio is 0.08% and it has a 12-month trailing dividend yield of 2.13%; the fund's top holdings include Costco (12.89%), Walmart, and Procter & Gamble, with the top 10 holdings comprising 63.47% of the portfolio. Year-to-date, FSTA is up 5.86% and 10.77% over the last 12 months, with a beta of 0.60 and a standard deviation of 12.77%.

Analysis

The Fidelity MSCI Consumer Staples Index ETF (FSTA), a passively managed fund with $1.38 billion in assets, offers exposure to the U.S. consumer staples sector by tracking the MSCI USA IMI Consumer Staples Index. It stands out with a highly competitive annual expense ratio of 0.08% and provides a 12-month trailing dividend yield of 2.13%. While the fund’s portfolio of approximately 105 holdings aims to diversify company-specific risk, it exhibits significant concentration, with the top ten constituents, including Costco Wholesale Corp (COST) at 12.89%, accounting for 63.47% of total assets. As of May 28, 2025, FSTA has registered a year-to-date return of 5.86% and a 12-month return of 10.77%. Its risk profile is characterized by a beta of 0.60 and a three-year standard deviation of 12.77%, positioning it as a medium-risk option. Despite these attributes and a moderately positive sentiment for the ETF (sentiment score 0.6), the broader Consumer Staples sector is ranked in the bottom 19% by Zacks. Reflecting this mixed outlook, FSTA carries a Zacks ETF Rank of 3 (Hold), indicating it is considered a "sufficient option" rather than a compelling buy at present.

Key Decisions for Investors

• Investors prioritizing low costs for U.S. consumer staples exposure may find FSTA's 0.08% expense ratio attractive, but should balance this against the sector's current Zacks ranking in the bottom 19%.
• Carefully assess the portfolio's concentration, where the top ten holdings form 63.47% of assets, particularly Costco's 12.89% weight, to ensure it aligns with desired diversification levels.
• With a Zacks 'Hold' rating and current sector headwinds, existing investors might maintain positions, while new capital could be deployed cautiously, perhaps after comparing FSTA with larger, similarly priced alternatives like XLP and VDC, or waiting for improved sector momentum.