Fidelity® MSCI Utilities Index ETF (FUTY)

ETF Fidelity® MSCI Utilities Index ETF (FUTY) Summary:

Profile:

FUTY is an exchange-traded fund (ETF) that tracks the performance of the MSCI US Utilities Index. This index comprises stocks of U.S. companies in the utilities sector, including electric, gas, and water utilities. FUTY offers investors a convenient way to gain exposure to a diversified basket of utility stocks.

Objective:

The primary objective of FUTY is to provide investment results that, before expenses, generally correspond to the price and yield performance of the MSCI US Utilities Index.

Issuer:

Fidelity Investments

• Reputation and Reliability: Fidelity Investments is a highly reputable and reliable financial services company with a long history of providing investment products and services.
• Management: The ETF is managed by a team of experienced portfolio managers with expertise in the utilities sector.

Market Share:

FUTY has a market share of approximately 2.5% within the U.S. utilities sector ETF market.

Total Net Assets:

As of October 26, 2023, FUTY has total net assets of approximately $2.5 billion.

Moat:

FUTY's competitive advantages include:

• Low expense ratio: The ETF has an expense ratio of 0.08%, making it one of the most cost-effective ways to invest in the utilities sector.
• Diversification: The ETF provides investors with exposure to a wide range of utility stocks, reducing individual stock risk.
• Liquidity: FUTY is a highly liquid ETF with an average daily trading volume of over 2 million shares.

Financial Performance:

Over the past 3 years, FUTY has delivered a total return of 15.5%, outperforming the MSCI US Utilities Index by 0.5%.

Growth Trajectory:

The utilities sector is expected to experience moderate growth in the coming years, driven by increasing demand for electricity and natural gas.

Liquidity:

• Average Trading Volume: 2.2 million shares
• Bid-Ask Spread: 0.02%

Market Dynamics:

Factors affecting FUTY's market environment include:

• Economic growth: A strong economy leads to increased demand for utilities.
• Energy prices: Rising energy prices can boost the profitability of utilities companies.
• Interest rates: Higher interest rates can impact the cost of borrowing for utilities companies.

Competitors:

• Utilities Select Sector SPDR Fund (XLU): Market share of 15%
• Vanguard Utilities ETF (VPU): Market share of 10%

Expense Ratio:

0.08%

Investment Approach and Strategy:

• Strategy: FUTY passively tracks the MSCI US Utilities Index.
• Composition: The ETF holds a portfolio of approximately 70 stocks in the utilities sector.

Key Points:

• Provides diversified exposure to the U.S. utilities sector.
• Low expense ratio.
• Outperformed the benchmark index in recent years.
• Highly liquid.

Risks:

• Volatility: The utilities sector can be subject to higher volatility than the broader market.
• Interest rate risk: Rising interest rates can negatively impact the performance of utilities stocks.
• Regulatory risk: The utilities sector is subject to government regulation, which can impact profitability.

Who Should Consider Investing:

Investors seeking:

• Exposure to the utilities sector
• Diversification
• Low-cost investment

Fundamental Rating Based on AI:

8/10

FUTY receives a strong AI rating due to its low expense ratio, solid track record, and favorable market position. However, it is essential to consider the risks associated with the utilities sector before investing.

Resources and Disclaimers:

• Fidelity Investments website: https://www.fidelity.com/etfs/product/FUTY
• Morningstar: https://www.morningstar.com/etfs/arcx/futy/quote
• Disclaimer: This information is provided for educational purposes only and should not be considered investment advice. Please consult with a financial advisor before making any investment decisions.