Should You Invest in the Fidelity MSCI Industrials Index ETF (FIDU)?
The Fidelity MSCI Industrials Index ETF (FIDU) was launched on 10/21/2013, and is a passively managed exchange traded fund designed to offer broad exposure to the Industrials – Broad segment of the equity market.
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.
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. 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 $409.04 M, 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.
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 1.65%.
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 Industrials sector–about 100% of the portfolio.
Looking at individual holdings, Boeing Co/the (BA) accounts for about 6.46% of total assets, followed by 3m Co (MMM) and Union Pacific Corp (UNP).
The top 10 holdings account for about 35.65% of total assets under management.
Performance and Risk
So far this year, FIDU has lost about -3.55%, and is down about -1.92% in the last one year (as of 12/03/2018). During this past 52-week period, the fund has traded between $34.67 and $41.16.
The ETF has a beta of 1.17 and standard deviation of 14.16% for the trailing three-year period, making it a medium risk choice in the space. With about 352 holdings, it effectively diversifies company-specific risk.
Fidelity MSCI Industrials 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, FIDU is a reasonable option for those seeking exposure to the Industrials ETFs area of the market. Investors might also want to consider some other ETF options in the space.
Vanguard Industrials ETF (VIS) tracks MSCI US Investable Market Industrials 25/50 Index and the Industrial Select Sector SPDR Fund (XLI) tracks Industrial Select Sector Index. Vanguard Industrials ETF has $3.66 B in assets, Industrial Select Sector SPDR Fund has $11.36 B. 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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FID-INDUSTL (FIDU): ETF Research Reports
Union Pacific Corporation (UNP): Free Stock Analysis Report
The Boeing Company (BA): Free Stock Analysis Report
3M Company (MMM): Free Stock Analysis Report
SPDR-INDU SELS (XLI): ETF Research Reports
VIPERS-INDUS (VIS): ETF Research Reports
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