FUTY Profile
The Fidelity MSCI Utilities Index ETF is designed to offer investors targeted exposure to the utilities sector within the U.S. equity market. The fund invests at least 80% of its assets in securities that are included in the MSCI USA IMI Utilities 25/50 Index. This index serves as a benchmark for the performance of the utilities sector, encompassing a wide range of companies involved in the provision of essential services such as electricity, water, and natural gas.
The MSCI USA IMI Utilities 25/50 Index is a market capitalization-weighted index that includes large-, mid-, and small-cap companies within the utilities sector. By investing in this index, the ETF provides investors with exposure to a diversified array of utility companies, which are often characterized by stable revenue streams and lower volatility compared to other sectors. These companies play a critical role in infrastructure and public services, making them an integral part of the economy.
As a non-diversified fund, the Fidelity MSCI Utilities Index ETF focuses its investments within the utilities sector, which may lead to a concentration of risk compared to more broadly diversified funds. The ETF may not hold all of the securities in the MSCI USA IMI Utilities 25/50 Index, allowing for some flexibility in portfolio construction. This approach helps the fund to align more closely with the performance of the index while accommodating practical considerations in managing the portfolio.
The ETF’s strategy of investing in the MSCI USA IMI Utilities 25/50 Index aims to provide investors with a representative sample of the utilities sector's performance. This sector-specific focus can be particularly appealing to those seeking to gain exposure to a traditionally stable and defensive sector. Investors should consider the sector's unique characteristics, including its typically lower growth but consistent income potential, when evaluating this ETF for their investment portfolio.
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