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Should You Invest in the Fidelity MSCI Telecommunication Services Index ETF (FCOM)?
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The Fidelity MSCI Telecommunication Services Index ETF (FCOM - Free Report) was launched on 10/21/2013, and is a passively managed exchange traded fund designed to offer broad exposure to the Technology - Telecom segment of the equity market.
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
Sector ETFs also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. Technology - Telecom is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 3, placing it in top 19%.
Index Details
The fund is sponsored by Fidelity. It has amassed assets over $240.48 M, making it the smallest ETF attempting to match the performance of the Technology - Telecom segment of the equity market. FCOM seeks to match the performance of the MSCI USA IMI Telecommunication Services 25/50 Index before fees and expenses.
The MSCI USA IMI Telecommunication Services 25/50 Index represents the performance of the telecommunication services sector in the U.S. equity market.
Costs
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain 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 2.92%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Telecom sector--about 100% of the portfolio.
Looking at individual holdings, Verizon Communications Inc (VZ - Free Report) accounts for about 24.88% of total assets, followed by At+t Inc (T - Free Report) and T Mobile Us Inc (TMUS - Free Report) .
The top 10 holdings account for about 74.05% of total assets under management.
Performance and Risk
So far this year, FCOM has lost about -0.58%, and is down about -0.86% in the last one year (as of 12/05/2018). During this past 52-week period, the fund has traded between $27.69 and $32.56.
The ETF has a beta of 0.62 and standard deviation of 16.05% for the trailing three-year period, making it a medium risk choice in the space. With about 25 holdings, it has more concentrated exposure than peers.
Alternatives
Fidelity MSCI Telecommunication Services Index ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, FCOM is an outstanding option for investors seeking exposure to the Telecommunication ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
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Should You Invest in the Fidelity MSCI Telecommunication Services Index ETF (FCOM)?
The Fidelity MSCI Telecommunication Services Index ETF (FCOM - Free Report) was launched on 10/21/2013, and is a passively managed exchange traded fund designed to offer broad exposure to the Technology - Telecom segment of the equity market.
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
Sector ETFs also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. Technology - Telecom is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 3, placing it in top 19%.
Index Details
The fund is sponsored by Fidelity. It has amassed assets over $240.48 M, making it the smallest ETF attempting to match the performance of the Technology - Telecom segment of the equity market. FCOM seeks to match the performance of the MSCI USA IMI Telecommunication Services 25/50 Index before fees and expenses.
The MSCI USA IMI Telecommunication Services 25/50 Index represents the performance of the telecommunication services sector in the U.S. equity market.
Costs
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain 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 2.92%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Telecom sector--about 100% of the portfolio.
Looking at individual holdings, Verizon Communications Inc (VZ - Free Report) accounts for about 24.88% of total assets, followed by At+t Inc (T - Free Report) and T Mobile Us Inc (TMUS - Free Report) .
The top 10 holdings account for about 74.05% of total assets under management.
Performance and Risk
So far this year, FCOM has lost about -0.58%, and is down about -0.86% in the last one year (as of 12/05/2018). During this past 52-week period, the fund has traded between $27.69 and $32.56.
The ETF has a beta of 0.62 and standard deviation of 16.05% for the trailing three-year period, making it a medium risk choice in the space. With about 25 holdings, it has more concentrated exposure than peers.
Alternatives
Fidelity MSCI Telecommunication Services Index ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, FCOM is an outstanding option for investors seeking exposure to the Telecommunication ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.