When it comes to investing in the consumer discretionary sector, there are two main options: the SPDR Consumer Discretionary Select Sector ETF (XLY) or the Fidelity MSCI Consumer Discretionary Index ETF (FDIS).
Both of these funds have their pros and cons, but which one is right for you? In this article, we will compare the two funds and help you decide.
FDIS vs XLY: What Are the Differences?
- FDIS is an ETF from Fidelity that tracks the MSCI USA IMI Consumer Discretionary Index, while XLY is an exchange-traded fund (ETF) that invests in stocks of companies included in the Consumer Discretionary Select Sector Index.
- FDIS has an expense ratio of 0.08%, while XLY has an expense ratio of 0.12%. This means that for every $10,000 invested, FDIS will charge $8 in fees, while XLY will charge $12.
- XLY is significantly larger than FDIS, with total net assets of 20.75 billion compared to FDIS’ 1.57 billion. You will find that it’s easier to enter and exit trades in larger funds like XLY, resulting in tighter bid/ask spreads and more efficient execution.
- The turnover rate of FDIS is currently 48%, which is higher than the turnover of XLY at 23%.
FDIS vs XLY: How Are They Similar?
- FDIS and XLY are passively managed funds, and they invest in companies that operate in the consumer discretionary sector .
- Both ETFs have the same dividend schedule. They distribute dividends to shareholders on a quarterly basis.
FDIS vs XLY: Top 10 Holdings
Their top holdings are identical but with different weights.
FDIS Top 10 Holdings
| COMPANY | SYMBOL | TOTAL NET ASSETS |
|---|---|---|
| Amazon Inc. | AMZN | 21.01% |
| Tesla Inc. | TSLA | 13.69% |
| Home Depot Inc. | HD | 7.10% |
| Nike Inc. Cl B | NKE | 3.48% |
| McDonald’s Corp. | MCD | 3.28% |
| Lowe’s Cos. | LOW | 2.94% |
| Starbucks Corp. | SBUX | 2.28% |
| Target Corp. | TGT | 1.87% |
| Booking Holdings Inc. | BKNG | 1.64% |
| TJX Cos. | TJX | 1.53% |
XLY Top 10 Holdings
| COMPANY | SYMBOL | TOTAL NET ASSETS |
|---|---|---|
| Amazon Inc. | AMZN | 22.24% |
| Tesla Inc. | TSLA | 18.51% |
| McDonald’s Corp. | MCD | 4.79% |
| Nike Inc. Cl B | NKE | 4.59% |
| Home Depot Inc. | HD | 4.49% |
| Lowe’s Cos. | LOW | 4.28% |
| Starbucks Corp. | SBUX | 3.30% |
| Target Corp. | TGT | 2.70% |
| Booking Holdings Inc. | BKNG | 2.36% |
| TJX Cos. | TJX | 2.19% |
FDIS vs XLY: Annual Performance
| Funds | Fidelity® MSCI Consumer Discretionary Index ETF | Consumer Discretionary Select Sector SPDR® Fund |
|---|---|---|
| 1 month | -9.73% | -9.45% |
| 3 months | -8.96% | -7.84% |
| 6 months | -1.70% | +2.89% |
| 1 year | +9.62% | +14.87% |
| 3 years | +24.75% | +20.62% |
| 5 years | +20.20% | +18.22% |
Which is Better, FDIS or XLY?
FDIS is better if you’re looking for an ETF with a less expense ratio. You will end up paying less in yearly fees.
XLY is better if you prefer an ETF with a longer track record, less turnover rate, and more assets under management.
Either way, both ETFs offer great opportunities for investors to put their money into the consumer discretionary sector.
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