Full access to Entrepreneur for $5
Subscribe

Should You Invest in the Fidelity MSCI Utilities Index ETF (FUTY)?

Sector ETF report for FUTY

By
This story originally appeared on Zacks

Designed to provide broad exposure to the Utilities - Broad segment of the equity market, the Fidelity MSCI Utilities Index ETF (FUTY) is a passively managed exchange traded fund launched on 10/21/2013.

- Zacks

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.

Investor-friendly, sector ETFs provide many options 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 15, placing it in bottom 6%.

Index Details

The fund is sponsored by Fidelity. It has amassed assets over $1.14 billion, making it one of the larger 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.

Costs

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 2.82%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. 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 99.40% of the portfolio.

Looking at individual holdings, Nextera Energy Inc Common Stock Usd.01 (NEE) accounts for about 13.93% of total assets, followed by Duke Energy Corp Common Stock Usd.001 (DUK) and Southern Co/the Common Stock Usd5.0 (SO).

The top 10 holdings account for about 54.61% of total assets under management.

Performance and Risk

The ETF return is roughly 13.15% and was up about 19.57% so far this year and in the past one year (as of 08/31/2021), respectively. FUTY has traded between $36.53 and $44.98 during this last 52-week period.

The ETF has a beta of 0.39 and standard deviation of 24.85% 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.

Alternatives

Fidelity MSCI Utilities 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, FUTY is a reasonable option for those seeking exposure to the Utilities/Infrastructure ETFs area of the market. Investors might also want to consider some other ETF options in the space.

Vanguard Utilities ETF (VPU) tracks MSCI US Investable Market Utilities 25/50 Index and the Utilities Select Sector SPDR ETF (XLU) tracks Utilities Select Sector Index. Vanguard Utilities ETF has $5.08 billion in assets, Utilities Select Sector SPDR ETF has $13.50 billion. VPU has an expense ratio of 0.10% and XLU charges 0.12%.

Bottom Line

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.



Bitcoin, Like the Internet Itself, Could Change Everything

Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.

Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly. 

See 3 crypto-related stocks now >>



Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

 

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

 

NextEra Energy, Inc. (NEE): Free Stock Analysis Report

 

Southern Company The (SO): Free Stock Analysis Report

 

Duke Energy Corporation (DUK): Free Stock Analysis Report

 

Utilities Select Sector SPDR ETF (XLU): ETF Research Reports

 

Vanguard Utilities ETF (VPU): ETF Research Reports

 

To read this article on Zacks.com click here.

 

Zacks Investment Research