Designed to provide broad exposure to the Industrials - Broad segment of the equity market, the Fidelity MSCI Industrials Index ETF (FIDU - Free Report) is a passively managed exchange traded fund launched on 10/21/2013.
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
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 16, placing it in bottom 0%.
The fund is sponsored by Fidelity. It has amassed assets over $464.48 M, 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.
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 1.67%.
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 99.90% of the portfolio.
Looking at individual holdings, Boeing Co/the (BA - Free Report) accounts for about 6.27% of total assets, followed by Honeywell International Inc (HON - Free Report) and Union Pacific Corp (UNP - Free Report) .
The top 10 holdings account for about 35.35% of total assets under management.
Performance and Risk
The ETF has added roughly 31.04% and it's up approximately 33.74% so far this year and in the past one year (as of 12/27/2019), respectively. FIDU has traded between $31.99 and $42.40 during this last 52-week period.
The ETF has a beta of 1.19 and standard deviation of 15.04% for the trailing three-year period, making it a medium risk choice in the space. With about 349 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 sufficient 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 - Free Report) tracks MSCI US Investable Market Industrials 25/50 Index and the Industrial Select Sector SPDR Fund (XLI - Free Report) tracks Industrial Select Sector Index. Vanguard Industrials ETF has $3.71 B in assets, Industrial Select Sector SPDR Fund has $10.56 B. VIS has an expense ratio of 0.10% and XLI charges 0.13%.
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.