Looking for broad exposure to the Energy - Broad segment of the equity market? You should consider the Fidelity MSCI Energy Index ETF (FENY), 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. Energy - 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 $381.06 million, making it one of the larger ETFs attempting to match the performance of the Energy - Broad segment of the equity market. FENY seeks to match the performance of the MSCI USA IMI Energy Index before fees and expenses.
MSCI USA IMI Energy Index represents the performance of the energy 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 11.47%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Energy sector--about 99.60% of the portfolio.
Looking at individual holdings, Exxon Mobil Corp (XOM) accounts for about 26.54% of total assets, followed by Chevron Corp (CVX) and Conocophillips (COP).
The top 10 holdings account for about 76.43% of total assets under management.
Performance and Risk
The ETF has lost about -44.72% so far this year and is down about -48.10% in the last one year (as of 04/23/2020). In that past 52-week period, it has traded between $6.20 and $18.43.
The ETF has a beta of 1.57 and standard deviation of 31.93% for the trailing three-year period, making it a high risk choice in the space. With about 119 holdings, it effectively diversifies company-specific risk.
Fidelity MSCI Energy Index ETF sports a Zacks ETF Rank of 5 (Strong Sell), which is based on expected asset class return, expense ratio, and momentum, among other factors. FENY, then, is not a great choice for investors seeking exposure to the Energy ETFs segment of the market. However, there are better ETFs in the space to consider.
Vanguard Energy ETF (VDE) tracks MSCI US Investable Market Energy 25/50 Index and the Energy Select Sector SPDR ETF (XLE) tracks Energy Select Sector Index. Vanguard Energy ETF has $2.55 billion in assets, Energy Select Sector SPDR ETF has $8.48 billion. VDE has an expense ratio of 0.10% and XLE 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.
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Fidelity MSCI Energy Index ETF (FENY): ETF Research Reports
Exxon Mobil Corporation (XOM) : Free Stock Analysis Report
Chevron Corporation (CVX) : Free Stock Analysis Report
ConocoPhillips (COP) : Free Stock Analysis Report
Energy Select Sector SPDR ETF (XLE): ETF Research Reports
Vanguard Energy ETF (VDE): ETF Research Reports
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