Looking for broad exposure to the Industrials - Broad segment of the equity market? You should consider the Fidelity MSCI Industrials Index ETF (
FIDU Quick Quote FIDU - Free Report) , a passively managed exchange traded fund launched on 10/21/2013.
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 are also funds of convenience, offering many ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Industrials - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 3, placing it in top 19%.
The fund is sponsored by Fidelity. It has amassed assets over $617.73 million, making it one of the average sized ETFs attempting to match the performance of the Industrials - Broad segment of the equity market. FIDU seeks to match the performance of the MSCI USA IMI Industrials Index before fees and expenses.
MSCI USA IMI Industrials Index represents the performance of the industrial sector in the U.S. equity market.
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 1.24%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Industrials sector--about 100% of the portfolio.
Looking at individual holdings, Union Pacific Corp Common Stock Usd2.5 (
UNP Quick Quote UNP - Free Report) accounts for about 4.14% of total assets, followed by Honeywell International Inc Common Stock Usd1.0 ( HON Quick Quote HON - Free Report) and Boeing Co/the Common Stock Usd5.0 ( BA Quick Quote BA - Free Report) .
The top 10 holdings account for about 31.09% of total assets under management.
Performance and Risk
Year-to-date, the Fidelity MSCI Industrials Index ETF has added about 6.04% so far, and is up about 13.78% over the last 12 months (as of 02/11/2021). FIDU has traded between $25.14 and $48.78 in this past 52-week period.
The ETF has a beta of 1.20 and standard deviation of 26.63% for the trailing three-year period, making it a medium risk choice in the space. With about 337 holdings, it effectively diversifies company-specific risk.
Fidelity MSCI Industrials Index ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, FIDU is a good option for those seeking exposure to the Industrials ETFs area of the market. Investors might also want to consider some other ETF options in the space.
Vanguard Industrials ETF (
VIS Quick Quote VIS - Free Report) tracks MSCI US Investable Market Industrials 25/50 Index and the Industrial Select Sector SPDR ETF ( XLI Quick Quote XLI - Free Report) tracks Industrial Select Sector Index. Vanguard Industrials ETF has $3.98 billion in assets, Industrial Select Sector SPDR ETF has $16.36 billion. VIS has an expense ratio of 0.10% and XLI charges 0.13%. Bottom Line
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Zacks ETF Center.