Launched on 10/21/2013, the Fidelity MSCI Industrials Index ETF (FIDU) is a passively managed exchange traded fund designed to provide a broad exposure to the Industrials - 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.
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 11, placing it in bottom 31%.
The fund is sponsored by Fidelity. It has amassed assets over $343.04 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.
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining 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 1.95%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. 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 99.90% of the portfolio.
Looking at individual holdings, Union Pacific Corp (UNP) accounts for about 4.41% of total assets, followed by Honeywell International Inc (HON) and Raytheon Technologies Corp (RTX).
The top 10 holdings account for about 32.52% of total assets under management.
Performance and Risk
Year-to-date, the Fidelity MSCI Industrials Index ETF has lost about -13.84% so far, and is down about -7.90% over the last 12 months (as of 07/01/2020). FIDU has traded between $25.14 and $43.87 in this past 52-week period.
The ETF has a beta of 1.18 and standard deviation of 25.65% for the trailing three-year period, making it a medium risk choice in the space. With about 338 holdings, it effectively diversifies company-specific risk.
Fidelity MSCI Industrials Index ETF sports a Zacks ETF Rank of 4 (Sell), which is based on expected asset class return, expense ratio, and momentum, among other factors. FIDU, then, is not a great choice for investors seeking exposure to the Industrials ETFs segment of the market. Instead, there are better ETFs in the space to consider.
Vanguard Industrials ETF (VIS) tracks MSCI US Investable Market Industrials 25/50 Index and the Industrial Select Sector SPDR ETF (XLI) tracks Industrial Select Sector Index. Vanguard Industrials ETF has $2.71 billion in assets, Industrial Select Sector SPDR ETF has $8.94 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.
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Fidelity MSCI Industrials Index ETF (FIDU): ETF Research Reports
Union Pacific Corporation (UNP) : Free Stock Analysis Report
Honeywell International Inc. (HON) : Free Stock Analysis Report
Vanguard Industrials ETF (VIS): ETF Research Reports
Industrial Select Sector SPDR ETF (XLI): ETF Research Reports
Raytheon Technologies Corporation (RTX) : Free Stock Analysis Report
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