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.
Sector ETFs also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. Industrials - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 13, placing it in bottom 19%.
The fund is sponsored by Fidelity. It has amassed assets over $291.38 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.
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 2.31%.
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 Industrials sector--about 100% of the portfolio.
Looking at individual holdings, Union Pacific Corp (UNP - Free Report) accounts for about 4.39% of total assets, followed by Lockheed Martin Corp (LMT - Free Report) and Honeywell International Inc (HON - Free Report) .
The top 10 holdings account for about 34.48% of total assets under management.
Performance and Risk
The ETF has lost about -24.63% so far this year and is down about -19.81% in the last one year (as of 04/24/2020). In that past 52-week period, it has traded between $25.14 and $43.87.
The ETF has a beta of 1.24 and standard deviation of 23.90% 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 reasonable 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 ETF (XLI - Free Report) tracks Industrial Select Sector Index. Vanguard Industrials ETF has $2.52 billion in assets, Industrial Select Sector SPDR ETF has $7.26 billion. 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.