Should You Invest in the Fidelity MSCI Industrials Index ETF (FIDU)?
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.
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are 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 15, placing it in bottom 6%.
The fund is sponsored by Fidelity. It has amassed assets over $438.34 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.
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 1.77%.
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 Industrials sector--about 100% of the portfolio.
Looking at individual holdings, Boeing Co/the (BA) accounts for about 6.31% of total assets, followed by Union Pacific Corp (UNP) and Honeywell International Inc (HON).
The top 10 holdings account for about 35.50% of total assets under management.
Performance and Risk
So far this year, FIDU has added about 18.95%, and is up roughly 1.85% in the last one year (as of 08/14/2019). During this past 52-week period, the fund has traded between $30.66 and $40.96.
The ETF has a beta of 1.19 and standard deviation of 14.78% for the trailing three-year period, making it a medium risk choice in the space. With about 351 holdings, it effectively diversifies company-specific risk.
Fidelity MSCI Industrials 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, FIDU is an excellent option for investors seeking exposure to the Industrials ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
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 $3.49 B in assets, Industrial Select Sector SPDR Fund has $9.65 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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Fidelity MSCI Industrials Index ETF (FIDU): ETF Research Reports
Union Pacific Corporation (UNP): Free Stock Analysis Report
The Boeing Company (BA): Free Stock Analysis Report
Honeywell International Inc. (HON): Free Stock Analysis Report
Industrial Select Sector SPDR Fund (XLI): ETF Research Reports
Vanguard Industrials ETF (VIS): ETF Research Reports
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