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Should You Invest in the Fidelity MSCI Utilities Index ETF (FUTY)?
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Looking for broad exposure to the Utilities - Broad segment of the U.S. equity market? You should consider the Fidelity MSCI Utilities Index ETF (FUTY - Free Report) , a passively managed exchange traded fund launched on 10/21/2013.
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.
Sector ETFs are also funds of convenience, offering many ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Utilities - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 15, placing it in bottom 6%.
Index Details
The fund is sponsored by Fidelity. It has amassed assets over $300.76 M, making it one of the larger ETFs attempting to match the performance of the Utilities - Broad segment of the U.S. equity market. FUTY seeks to match the performance of the MSCI USA IMI Utilities Index before fees and expenses.
MSCI USA IMI Utilities Index represents the performance of the utilities sector in the U.S. equity market.
Costs
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.08%, making it the least expensive product in the space.
It has a 12-month trailing dividend yield of 3.31%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Utilities sector--about 99.70% of the portfolio.
Looking at individual holdings, Nextera Energy Inc (NEE - Free Report) accounts for about 9.70% of total assets, followed by Duke Energy Corp (DUK - Free Report) and Southern Co/the (SO - Free Report) .
The top 10 holdings account for about 49.12% of total assets under management.
Performance and Risk
So far this year, FUTY has lost about -3.13%, and is down about -2.70% in the last one year (as of 06/19/2018). During this past 52-week period, the fund has traded between $31.11 and $36.94.
The ETF has a beta of 0.19 and standard deviation of 13.92% for the trailing three-year period, making it a medium risk choice in the space. With about 74 holdings, it effectively diversifies company-specific risk.
Alternatives
Fidelity MSCI Utilities Index ETF sports a Zacks ETF Rank of 5 (Strong Sell), which is based on expected asset class return, expense ratio, and momentum, among other factors. FUTY, then, is not the best option for investors seeking exposure to the Utilities/Infrastructure ETFs segment of the market. Instead, there are better ETFs in the space to consider.
Vanguard Utilities ETF (VPU - Free Report) tracks MSCI US Investable Market Utilities 25/50 Index and the Utilities Select Sector SPDR Fund (XLU - Free Report) tracks Utilities Select Sector Index. Vanguard Utilities ETF has $2.55 B in assets, Utilities Select Sector SPDR Fund has $6.66 B. VPU has an expense ratio of 0.10% and XLU charges 0.13%.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Should You Invest in the Fidelity MSCI Utilities Index ETF (FUTY)?
Looking for broad exposure to the Utilities - Broad segment of the U.S. equity market? You should consider the Fidelity MSCI Utilities Index ETF (FUTY - Free Report) , a passively managed exchange traded fund launched on 10/21/2013.
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.
Sector ETFs are also funds of convenience, offering many ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Utilities - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 15, placing it in bottom 6%.
Index Details
The fund is sponsored by Fidelity. It has amassed assets over $300.76 M, making it one of the larger ETFs attempting to match the performance of the Utilities - Broad segment of the U.S. equity market. FUTY seeks to match the performance of the MSCI USA IMI Utilities Index before fees and expenses.
MSCI USA IMI Utilities Index represents the performance of the utilities sector in the U.S. equity market.
Costs
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.08%, making it the least expensive product in the space.
It has a 12-month trailing dividend yield of 3.31%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Utilities sector--about 99.70% of the portfolio.
Looking at individual holdings, Nextera Energy Inc (NEE - Free Report) accounts for about 9.70% of total assets, followed by Duke Energy Corp (DUK - Free Report) and Southern Co/the (SO - Free Report) .
The top 10 holdings account for about 49.12% of total assets under management.
Performance and Risk
So far this year, FUTY has lost about -3.13%, and is down about -2.70% in the last one year (as of 06/19/2018). During this past 52-week period, the fund has traded between $31.11 and $36.94.
The ETF has a beta of 0.19 and standard deviation of 13.92% for the trailing three-year period, making it a medium risk choice in the space. With about 74 holdings, it effectively diversifies company-specific risk.
Alternatives
Fidelity MSCI Utilities Index ETF sports a Zacks ETF Rank of 5 (Strong Sell), which is based on expected asset class return, expense ratio, and momentum, among other factors. FUTY, then, is not the best option for investors seeking exposure to the Utilities/Infrastructure ETFs segment of the market. Instead, there are better ETFs in the space to consider.
Vanguard Utilities ETF (VPU - Free Report) tracks MSCI US Investable Market Utilities 25/50 Index and the Utilities Select Sector SPDR Fund (XLU - Free Report) tracks Utilities Select Sector Index. Vanguard Utilities ETF has $2.55 B in assets, Utilities Select Sector SPDR Fund has $6.66 B. VPU has an expense ratio of 0.10% and XLU charges 0.13%.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.