Launched on 10/21/2013, the Fidelity MSCI Industrials Index ETF (
FIDU Quick Quote FIDU - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Industrials - Broad 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.
Additionally, sector ETFs offer convenient 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 7, placing it in top 44%.
The fund is sponsored by Fidelity. It has amassed assets over $850.67 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.
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are 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 1.09%.
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 Industrials sector--about 100% of the portfolio.
Looking at individual holdings, Honeywell International Inc Common Stock Usd1.0 (
HON Quick Quote HON - Free Report) accounts for about 3.79% of total assets, followed by United Parcel Service Cl B Common Stock Usd.01 ( UPS Quick Quote UPS - Free Report) and Union Pacific Corp Common Stock Usd2.5 ( UNP Quick Quote UNP - Free Report) .
The top 10 holdings account for about 30.85% of total assets under management.
Performance and Risk
The ETF has added roughly 18.04% and was up about 36.62% so far this year and in the past one year (as of 09/13/2021), respectively. FIDU has traded between $39.03 and $55.65 during this last 52-week period.
The ETF has a beta of 1.21 and standard deviation of 26.65% for the trailing three-year period, making it a medium risk choice in the space. With about 348 holdings, it effectively diversifies company-specific risk.
Fidelity MSCI Industrials 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, FIDU is an outstanding option for investors seeking exposure to the Industrials ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
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 $5.29 billion in assets, Industrial Select Sector SPDR ETF has $17.93 billion. VIS has an expense ratio of 0.10% and XLI charges 0.12%. Bottom Line
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