FSTA: Consumer Staples Stocks Are Probably Fairly Valued, Cyclically Unattractive

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Summary

  • FSTA invests in defensive consumer staples stocks.
  • The fund has out-performed in recent times during a recent bear market which is possibly not over.
  • I would argue the fund is roughly fairly valued, while the tide is turning on the business cycle, a new cycle will likely bring characteristic under-performance in consumer staples.

Unrecognizable woman marvels at grocery bread selection

SDI Productions

Fidelity MSCI Consumer Staples Index ETF (NYSEARCA:FSTA) is an exchange-traded fund that provides investors with direct exposure to characteristically defensive stocks in the consumer staples sector. The fund carries a low expense ratio of just 0.08%, and was

FSTA ETF Net Fund Flows

Fidelity.com

FSTA Business Cycle Positioning

Fidelity.com

United States Core Inflation Rate

TradingEconomics.com

Estimate for FSTA's IRR Potential

Author's Calculations

This article was written by

Hedge Insider profile picture
1.57K Followers
Providing commentary and analysis, principally focused on global macro, foreign exchange, and equities as an asset class. Primary interests include equity investing from an international perspective, and FX fair values.

Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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