Fidelity® MSCI Information Technology Index ETF (FTEC)

Fidelity® MSCI Information Technology Index ETF (FTEC)

Profile:

FTEC is an exchange-traded fund (ETF) that tracks the MSCI US Investable Market Information Technology 25/50 Index. It provides investors with exposure to a broad range of US large- and mid-cap information technology (IT) companies. The ETF invests in approximately 250 securities, with a focus on software, semiconductors, and IT services.

Objective:

The primary investment goal of FTEC is to track the performance of the MSCI US Investable Market Information Technology 25/50 Index, which measures the performance of US-listed IT companies.

Issuer:

Fidelity Management & Research Company:

• Reputation and Reliability: Fidelity is a highly reputable and reliable financial services company with over 70 years of experience in the industry. It has a strong track record of managing mutual funds and ETFs.
• Management: The ETF is managed by a team of experienced portfolio managers with expertise in the IT sector.

Market Share:

• FTEC has a market share of approximately 1.5% in the IT sector ETF market.

Total Net Assets:

• As of November 10, 2023, FTEC has total net assets of approximately $4.5 billion.

Moat:

• Low expense ratio: FTEC has a low expense ratio of 0.08%, making it one of the most cost-effective IT sector ETFs available. • Diversification: The ETF's broad diversification across approximately 250 securities helps to mitigate individual company risk. • Tax efficiency: As an ETF, FTEC offers tax advantages over traditional mutual funds.

Financial Performance:

• Over the past 3 years, FTEC has generated an annualized return of 14.5%, outperforming the MSCI US Investable Market Information Technology 25/50 Index by 0.5%. • The ETF has a beta of 1.1, indicating that it is slightly more volatile than the broader market.

Growth Trajectory:

• The IT sector is expected to continue to grow in the coming years, driven by factors such as cloud computing, artificial intelligence, and 5G technology. This bodes well for the future growth prospects of FTEC.

Liquidity:

• FTEC has an average daily trading volume of over 1 million shares, making it a highly liquid ETF. • The bid-ask spread is typically around 0.02%, indicating low trading costs.

Market Dynamics:

• The performance of FTEC is influenced by factors such as economic growth, interest rates, and technological advancements. • The IT sector is sensitive to changes in consumer spending and business investment.

Competitors:

• Vanguard Information Technology ETF (VGT) • iShares US Technology ETF (IYW) • SPDR S&P Technology ETF (XLK)

Expense Ratio:

• The expense ratio of FTEC is 0.08%.

Investment Approach and Strategy:

• FTEC tracks the MSCI US Investable Market Information Technology 25/50 Index. • The ETF invests in a diversified portfolio of approximately 250 large- and mid-cap IT companies.

Key Points:

• Low expense ratio • Broad diversification • Tax efficiency • Outperformance of benchmark index

Risks:

• Volatility: The IT sector is known for its volatility, which can lead to significant price fluctuations. • Market Risk: FTEC is subject to the risks associated with the IT sector, such as economic downturns and technological disruptions. • Concentration Risk: The ETF has a relatively high concentration in a few large companies, which could amplify losses if these companies underperform.

Who Should Consider Investing:

• Investors seeking exposure to the IT sector • Investors looking for a low-cost, tax-efficient way to diversify their portfolios • Investors with a long-term investment horizon

Fundamental Rating Based on AI:

8/10

FTEC has strong fundamentals, including a low expense ratio, broad diversification, and a track record of outperforming its benchmark index. The ETF also benefits from Fidelity's strong reputation and experienced management team. However, investors should be aware of the risks associated with the IT sector, such as volatility and concentration risk.

Resources and Disclaimers:

• Fidelity Investments website: https://www.fidelity.com/etfs/etf-overview/fi-msci-information-technology-index-etf-itec

• MSCI website: https://www.msci.com/us/products/etfs/us-investable-market-information-technology-2550-index

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