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Utilities ETF (FUTY) Hits New 52-Week High

Sanghamitra Saha

For investors seeking momentum, Fidelity MSCI Utilities Index ETF (FUTY) is probably on radar now. The fund just hit a 52-week high and is up about 23.7% from its 52-week low price of $32.05/share.

But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed:

FUTY in Focus

This ETF provides exposure to the utilities sector with key holdings in electric utilities and multi utilities. It is concentrated on the top firm – Nextera Energy (NEE) – with double-digit exposure, while other firms hold no more than 6.75% of assets. FUTY charges 8 bps in annual fees (see: all the Utilities ETFs here).

Why the Move?

The utilities sector has been an area to watch lately given the bouts of volatility and uncertainty that bode well for the utility stocks. Utilities is relatively protected from large swings (ups and downs) in the stock market and is thus considered a defensive investment or one that is unaffected by economic cycles and politics. Additionally, utilities offer solid dividend payouts and excellent capital appreciation over the longer term. The sector is rate-sensitive and should thus do well given the Fed’s dovish stance.

More Gains Ahead?

Currently, FUTY has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook. Therefore, it is hard to get a handle on its future returns one way or the other. However, the fund has a positive weighted alpha of 21.80, which hints at more gains. So, there is definitely still some promise for those who want to ride on this ETF a little longer.

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Fidelity MSCI Utilities Index ETF (FUTY): ETF Research Reports
 
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