Fidelity® MSCI Industrials Index ETF (FIDU)

Overview

The Fidelityu00ae MSCI Industrials Index ETF (FIDU) seeks to provide investment results that correspond to the performance of the MSCI USA IMI Industrials Index. It invests primarily in stocks of U.S. industrials companies, focusing on large, mid, and small-cap companies within the sector. The ETF employs a replication strategy, investing substantially all of its assets in the securities of the underlying index, holding each stock in approximately the same proportion as its weighting in the index.

Reputation and Reliability

Fidelity is a well-established and reputable financial services company with a long track record in asset management.

Management Expertise

Fidelity has a large and experienced team of portfolio managers and analysts dedicated to managing its ETF offerings.

Goal

To provide investment results that correspond to the performance of the MSCI USA IMI Industrials Index.

Investment Approach and Strategy

Strategy: The ETF aims to track the MSCI USA IMI Industrials Index.

Composition The ETF holds stocks of U.S. companies classified in the industrials sector, including aerospace & defense, construction, machinery, transportation, and related industries.

Market Share: FIDU has a moderate market share within the industrials ETF segment.

Total Net Assets (AUM): 54680000

Key Competitors

• Industrial Select Sector SPDRu00ae Fund (XLI)
• Vanguard Industrials ETF (VIS)
• iShares U.S. Industrials ETF (IYJ)

Competitive Landscape

The industrial ETF sector is dominated by XLI, VIS, and IYJ. FIDU, as a smaller player, may offer slightly lower expense ratios or a different weighting methodology, but faces a significant challenge in attracting assets away from the established leaders. FIDU's competitive advantage, if any, lies in its expense ratio (sometimes lower) and commission-free trading for Fidelity customers, but is still subject to the same market conditions as its competitors.

Historical Performance: Historical performance can be found on Fidelity's website and other financial data providers.

Benchmark Comparison: The ETF's performance is compared against the MSCI USA IMI Industrials Index. Tracking error would need to be quantified to determine effectiveness.

Expense Ratio: 0.08

Average Trading Volume

FIDU's average trading volume can fluctuate based on market conditions but is generally lower compared to larger, more established ETFs like XLI, which affects liquidity.

Bid-Ask Spread

The bid-ask spread can vary, but it's typically wider than more liquid industrial ETFs like XLI, indicating a higher cost for immediate trading.

Market Environment Factors

Economic indicators like GDP growth, manufacturing PMI, and infrastructure spending plans can significantly affect FIDU's performance. Sector-specific factors like supply chain disruptions and labor costs also play a crucial role.

Growth Trajectory

FIDU's growth trajectory depends on the overall performance of the U.S. industrials sector, broader market trends, and its ability to attract assets by offering competitive expense ratios and tracking the index closely. No major changes to strategy and holdings at this time.

Competitive Edge

FIDU's primary advantage comes from being a Fidelity product, potentially offering commission-free trading for Fidelity brokerage clients. Its low expense ratio could be another selling point, especially for cost-conscious investors. However, its relatively small size and lower trading volume compared to competitors hinder its overall attractiveness. FIDU tracks a well-known index making it a very diverse ETF in this space. Overall, the moat is limited due to the dominance of larger, more liquid competitors.

Volatility

FIDU's volatility is similar to that of the broader industrials sector and the overall market. It should be expected to experience periods of high and low volatility in accordance with market changes.

Market Risk

FIDU is subject to market risk, sector-specific risks within the industrials industry, and the risk that its underlying index may underperform. Cyclical industries pose inherent risk.

Ideal Investor Profile

The ideal investor is someone seeking exposure to the U.S. industrials sector, looking for low-cost index tracking, and potentially a Fidelity brokerage client benefitting from commission-free trading. This ETF is suitable for investors with moderate risk tolerance seeking long-term capital appreciation.

Market Risk

FIDU is suitable for long-term investors and passive index followers who want exposure to the industrials sector at a low cost. It may not be ideal for active traders due to lower liquidity and potential wider bid-ask spreads.

Fidelityu00ae MSCI Industrials Index ETF (FIDU) is a low-cost ETF offering exposure to the U.S. industrials sector by tracking the MSCI USA IMI Industrials Index. It benefits from Fidelity's brand and commission-free trading for its clients. However, it faces stiff competition from larger, more liquid ETFs like XLI and VIS. While cost-effective, its smaller AUM and trading volume may limit its appeal to some investors, but it stills offer great diversity within the industrials sector.

Data Sources:

• Fidelity Investments Website
• ETF.com
• Morningstar
• Bloomberg

Disclaimers:

The data provided is for informational purposes only and should not be considered financial advice. Market conditions can change rapidly, and past performance is not indicative of future results. Consult with a qualified financial advisor before making any investment decisions.