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Should You Invest in the Fidelity MSCI Utilities Index ETF (FUTY)?
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The Fidelity MSCI Utilities Index ETF (FUTY - Free Report) was launched on 10/21/2013, and is a passively managed exchange traded fund designed to offer broad exposure to the Utilities - Broad segment of the equity market.
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds 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 12, placing it in bottom 25%.
Index Details
The fund is sponsored by Fidelity. It has amassed assets over $1.90 billion, making it one of the larger ETFs attempting to match the performance of the Utilities - Broad segment of the equity market. FUTY seeks to match the performance of the MSCI USA IMI Utilities Index before fees and expenses.
The MSCI USA IMI Utilities Index represents the performance of the utilities sector in the U.S. equity market.
Costs
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
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 2.71%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. 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 99.50% of the portfolio.
Looking at individual holdings, Nextera Energy Inc Common Stock Usd.01 (NEE - Free Report) accounts for about 13.68% of total assets, followed by Duke Energy Corp Common Stock Usd.001 (DUK - Free Report) and Southern Co/the Common Stock Usd5.0 (SO - Free Report) .
The top 10 holdings account for about 54.44% of total assets under management.
Performance and Risk
The ETF has added about 1.02% so far this year and is up roughly 10.64% in the last one year (as of 06/13/2022). In that past 52-week period, it has traded between $40.99 and $49.41.
The ETF has a beta of 0.47 and standard deviation of 24.98% for the trailing three-year period, making it a medium risk choice in the space. With about 68 holdings, it effectively diversifies company-specific risk.
Alternatives
Fidelity MSCI Utilities 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, FUTY is a sufficient option for those seeking exposure to the Utilities/Infrastructure ETFs area of the market. Investors might also want to consider some other ETF options in the space.
Vanguard Utilities ETF (VPU - Free Report) tracks MSCI US Investable Market Utilities 25/50 Index and the Utilities Select Sector SPDR ETF (XLU - Free Report) tracks Utilities Select Sector Index. Vanguard Utilities ETF has $6.11 billion in assets, Utilities Select Sector SPDR ETF has $15.92 billion. VPU has an expense ratio of 0.10% and XLU charges 0.10%.
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)?
The Fidelity MSCI Utilities Index ETF (FUTY - Free Report) was launched on 10/21/2013, and is a passively managed exchange traded fund designed to offer broad exposure to the Utilities - Broad segment of the equity market.
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds 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 12, placing it in bottom 25%.
Index Details
The fund is sponsored by Fidelity. It has amassed assets over $1.90 billion, making it one of the larger ETFs attempting to match the performance of the Utilities - Broad segment of the equity market. FUTY seeks to match the performance of the MSCI USA IMI Utilities Index before fees and expenses.
The MSCI USA IMI Utilities Index represents the performance of the utilities sector in the U.S. equity market.
Costs
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
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 2.71%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. 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 99.50% of the portfolio.
Looking at individual holdings, Nextera Energy Inc Common Stock Usd.01 (NEE - Free Report) accounts for about 13.68% of total assets, followed by Duke Energy Corp Common Stock Usd.001 (DUK - Free Report) and Southern Co/the Common Stock Usd5.0 (SO - Free Report) .
The top 10 holdings account for about 54.44% of total assets under management.
Performance and Risk
The ETF has added about 1.02% so far this year and is up roughly 10.64% in the last one year (as of 06/13/2022). In that past 52-week period, it has traded between $40.99 and $49.41.
The ETF has a beta of 0.47 and standard deviation of 24.98% for the trailing three-year period, making it a medium risk choice in the space. With about 68 holdings, it effectively diversifies company-specific risk.
Alternatives
Fidelity MSCI Utilities 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, FUTY is a sufficient option for those seeking exposure to the Utilities/Infrastructure ETFs area of the market. Investors might also want to consider some other ETF options in the space.
Vanguard Utilities ETF (VPU - Free Report) tracks MSCI US Investable Market Utilities 25/50 Index and the Utilities Select Sector SPDR ETF (XLU - Free Report) tracks Utilities Select Sector Index. Vanguard Utilities ETF has $6.11 billion in assets, Utilities Select Sector SPDR ETF has $15.92 billion. VPU has an expense ratio of 0.10% and XLU charges 0.10%.
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.