Is Fidelity's Sleepy ETF Actually Easy Money In 2026?

"The Fidelity MSCI Consumer Discretionary Index ETF (NYSEARCA:FDIS) isn't making headlines, and that's the point. Up 3% to start 2026 after a 7% gain in 2025, this $1.9 billion fund has quietly underperformed the broader market while charging just 0.084% annually. The question is whether sleepy becomes profitable as consumer spending shifts in 2026."

"FDIS gives investors pure-play exposure to consumer discretionary stocks, tracking an MSCI index that's 97.7% concentrated in the sector. Nearly 40% of the portfolio sits in just two stocks. Amazon (NASDAQ:AMZN) commands 21% while Tesla (NASDAQ:TSLA) holds 18.28%, creating a tug-of-war playing out in real time. Amazon is up nearly 6% year-to-date, while Tesla has declined 3.75%, explaining much of FDIS's early momentum."

"S&P Global forecasts real consumer spending growth will slow to 2% in 2026 from 2.7% historically, marking a cycle low. This matters because consumer discretionary stocks live and die by discretionary income. When households tighten budgets, they cut restaurant visits, delay home improvement projects, and postpone new car purchases before touching essentials. The positive signal? Recession probability on prediction markets has dropped from 32% to 23.5% over the past month, suggesting the economy may achieve a soft landing."

FDIS returned 3% to start 2026 after a 7% gain in 2025 and manages about $1.9 billion while charging a 0.084% annual fee. The ETF offers nearly pure-play exposure to consumer discretionary, tracking an MSCI index that is 97.7% sector-concentrated with almost 40% of assets in Amazon (21%) and Tesla (18.28%). Amazon is up nearly 6% year-to-date while Tesla is down about 3.75%. Economists forecast real consumer spending growth slowing to 2% in 2026 from 2.7% historically, and prediction-market recession odds dropped from 32% to 23.5%. If spending holds near 2%, FDIS should hold up; a drop toward 1% would pressure performance and prompt rotation to defensive sectors. Tesla's earnings deterioration presents a key micro risk.

Read at 24/7 Wall St.