FENY Profile
The Fidelity MSCI Energy Index ETF focuses on providing investors with exposure to the U.S. energy sector through a diversified portfolio of energy-related securities. Under normal circumstances, the fund invests at least 80% of its assets in the securities that comprise its underlying index, the MSCI USA IMI Energy 25/50 Index. This index is designed to track the performance of the energy sector within the broader U.S. equity market.
The MSCI USA IMI Energy 25/50 Index includes companies that are involved in the exploration, production, and distribution of energy resources, such as oil, natural gas, and renewable energy. The index employs a 25/50 rule, which limits the weight of any single security to 25% and any combination of securities from a single sector to 50% of the index's total market capitalization. This rule helps to maintain a balanced representation of the energy sector while minimizing the impact of individual securities.
The ETF's strategy may involve holding a representative sample of the index's securities rather than a full replication of all index components. This approach allows the fund to manage costs and maintain liquidity while seeking to achieve performance results that closely align with the index. By investing in the ETF, investors gain targeted exposure to the energy sector's performance, which can be influenced by factors such as commodity prices, regulatory changes, and technological advancements.
As a sector-focused fund, the Fidelity MSCI Energy Index ETF is non-diversified and may have concentrated exposure to energy-related industries. This concentration can lead to heightened sensitivity to sector-specific risks, such as fluctuations in energy prices and geopolitical events affecting energy markets. Investors should consider these risks in relation to their overall investment strategy and objectives when evaluating the fund.
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