FHLC Profile
The Fidelity MSCI Health Care Index ETF is designed to offer investors targeted exposure to the health care sector within the U.S. equity market. The fund invests at least 80% of its assets in securities that are part of the MSCI USA IMI Health Care 25/50 Index, its underlying benchmark. This index tracks the performance of the health care sector, including companies across pharmaceuticals, biotechnology, medical devices, and health care services.
The MSCI USA IMI Health Care 25/50 Index is constructed to reflect the performance of a broad array of health care companies while adhering to specific diversification constraints. The index employs a 25/50 rule, which limits any single security's weight to a maximum of 25% and any sector's combined weight to 50% of the index's total market capitalization. This methodology ensures a balanced representation of the health care sector and reduces the impact of individual stock fluctuations.
The ETF's approach to replicating the index may involve holding a representative sample of the index's securities rather than including every component. This strategy helps to manage transaction costs and liquidity while striving to deliver performance that aligns closely with the index. By investing in the fund, investors gain exposure to a broad range of health care companies, which can benefit from demographic trends, advancements in medical technology, and evolving health care policies.
As a sector-specific fund, the Fidelity MSCI Health Care Index ETF is non-diversified, concentrating its investments in the health care industry. This focus can lead to increased sensitivity to sector-specific risks, such as regulatory changes, patent expirations, and health care reforms. Investors should carefully consider these risks and how they fit within their overall investment portfolio and objectives.
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