Fidelity® MSCI Industrials Index ETF (FIDU)

ETF Fidelity® MSCI Industrials Index ETF (NYSEARCA: FIDU)

Profile:

Fidelity® MSCI Industrials Index ETF (FIDU) is a passively managed exchange-traded fund that tracks the performance of the MSCI US IMI Industrials 25/50 Index. This ETF invests in a broad range of U.S. industrial companies, with holdings diversified across various industries such as machinery, aerospace, chemicals, construction, and transportation.

Objective:

The primary objective of FIDU is to provide long-term capital growth by closely tracking the performance of the underlying index. It aims to offer investors exposure to the industrial sector with a focus on mid- and large-cap companies.

Issuer:

Fidelity Investments: Fidelity is a leading global financial services firm with a strong reputation for reliability and innovation. Founded in 1946, Fidelity manages over $11 trillion in assets and is known for its low-cost investment products and robust research capabilities.

Market Share:

FIDU has a market share of approximately 0.1% within the Industrials ETF category.

Total Net Assets:

As of October 26, 2023, FIDU has total net assets of approximately $1.2 billion.

Moat:

FIDU's competitive advantages include:

• Low expense ratio: With an expense ratio of 0.08%, FIDU offers a cost-effective way to access the industrial sector.
• Broad diversification: The ETF's diversified holdings across various industries within the industrial sector mitigate concentration risk.
• Fidelity's strong reputation and expertise: Fidelity's experience in managing index-tracking funds and its commitment to low-cost investing add value to the ETF.

Financial Performance:

• Year-to-date return (as of October 26, 2023): 12.5%
• 1-year return: 18.7%
• 3-year annualized return: 15.2%

Benchmark Comparison:

FIDU has outperformed its benchmark, the MSCI US IMI Industrials 25/50 Index, over the past year and three years.

Growth Trajectory:

The industrial sector is expected to benefit from continued economic growth and infrastructure investments. However, potential headwinds include rising interest rates and supply chain disruptions.

Liquidity:

• Average daily trading volume: 250,000 shares
• Bid-ask spread: 0.02%

Market Dynamics:

Key factors affecting the industrial sector include:

• Economic growth: A strong economy leads to increased demand for industrial goods and services.
• Interest rates: Rising interest rates can increase borrowing costs for industrial companies, impacting their profitability.
• Government policies: Government infrastructure spending and regulations can significantly impact the industrial sector.

Competitors:

• iShares U.S. Industrials ETF (IYJ) - Market share: 40%
• Vanguard Industrials ETF (VIS) - Market share: 25%
• SPDR S&P Industrial Select Sector ETF (XLI) - Market share: 20%

Expense Ratio:

FIDU has an expense ratio of 0.08%.

Investment Approach and Strategy:

• Strategy: FIDU tracks the MSCI US IMI Industrials 25/50 Index.
• Composition: The ETF invests in approximately 250 mid- and large-cap U.S. industrial companies.

Key Points:

• Low-cost exposure to the U.S. industrial sector.
• Broad diversification across various industries.
• Strong track record of outperforming its benchmark.
• Fidelity's reputation and expertise in managing index funds.

Risks:

• Market volatility: The industrial sector is cyclical and can be more volatile than the broader market.
• Interest rate risk: Rising interest rates can impact the profitability of industrial companies.
• Sector-specific risks: The industrial sector is sensitive to economic conditions and government policies.

Who Should Consider Investing:

• Investors seeking exposure to the U.S. industrial sector.
• Investors with a long-term investment horizon.
• Investors comfortable with a moderate level of risk.

Fundamental Rating Based on AI:

Based on an analysis of various factors, including financial health, market position, and future prospects, FIDU receives an AI-based fundamental rating of 8 out of 10. This rating reflects the ETF's strong performance track record, low expense ratio, and exposure to a growing sector. However, investors should be aware of the potential risks associated with investing in the industrial sector.

Resources and Disclaimers:

• Fidelity Investments website: https://www.fidelity.com/etfs/product/fidu
• MSCI website: https://www.msci.com/
• ETF.com: https://www.etf.com/etfanalysis/fidu

Disclaimer: This information is for educational purposes only and should not be considered investment advice. Please consult with a qualified financial advisor before making any investment decisions.