The Fidelity MSCI Utilities Index ETF (FUTY) 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.
Additionally, sector ETFs offer convenient 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 8, placing it in top 50%.
The fund is sponsored by Fidelity. It has amassed assets over $897.61 M, making it one of the average sized 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.
MSCI USA IMI Utilities Index represents the performance of the utilities 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 2.72%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Utilities sector--about 99.70% of the portfolio.
Looking at individual holdings, Nextera Energy Inc (NEE) accounts for about 11.19% of total assets, followed by Dominion Energy Inc (D) and Southern Co/the (SO).
The top 10 holdings account for about 53.14% of total assets under management.
Performance and Risk
The ETF return is roughly 21.38% so far this year and was up about 15.32% in the last one year (as of 12/06/2019). In that past 52-week period, it has traded between $33.93 and $42.60.
The ETF has a beta of 0.18 and standard deviation of 12.18% for the trailing three-year period, making it a medium risk choice in the space. With about 69 holdings, it effectively diversifies company-specific risk.
Fidelity MSCI Utilities Index ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, FUTY is an outstanding option for investors seeking exposure to the Utilities/Infrastructure ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
Vanguard Utilities ETF (VPU) tracks MSCI US Investable Market Utilities 25/50 Index and the Utilities Select Sector SPDR Fund (XLU) tracks Utilities Select Sector Index. Vanguard Utilities ETF has $4.33 B in assets, Utilities Select Sector SPDR Fund has $10.96 B. VPU has an expense ratio of 0.10% and XLU 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 Utilities Index ETF (FUTY): ETF Research Reports
Southern Company (The) (SO) : Free Stock Analysis Report
Dominion Energy Inc. (D) : Free Stock Analysis Report
NextEra Energy, Inc. (NEE) : Free Stock Analysis Report
Utilities Select Sector SPDR Fund (XLU): ETF Research Reports
Vanguard Utilities ETF (VPU): ETF Research Reports
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