Should You Invest in the Fidelity MSCI Utilities Index ETF (FUTY)?

If you're interested in broad exposure to the Utilities - Broad segment of the equity market, look no further than the Fidelity MSCI Utilities Index ETF (FUTY), a passively managed exchange traded fund launched on 10/21/2013.

An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.

Additionally, sector ETFs offer convenient ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Utilities - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 2, placing it in top 13%.

Index Details

The fund is sponsored by Fidelity. It has amassed assets over $1.83 billion, making it one of the larger ETFs attempting to match the performance of the Utilities - Broad segment of the equity market. FUTY seeks to match the performance of the MSCI USA IMI Utilities Index before fees and expenses.

The MSCI USA IMI Utilities Index represents the performance of the utilities sector in the U.S. equity market.

Costs

When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.

Annual operating expenses for this ETF are 0.08%, making it the least expensive product in the space.

It has a 12-month trailing dividend yield of 2.70%.

Sector Exposure and Top Holdings

While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.

This ETF has heaviest allocation in the Utilities sector--about 99.90% of the portfolio.

Looking at individual holdings, Nextera Energy Inc Common Stock Usd.01 (NEE) accounts for about 10.09% of total assets, followed by Southern Co/the Common Stock Usd5.0 (SO) and Duke Energy Corp Common Stock Usd.001 (DUK).

The top 10 holdings account for about 51.36% of total assets under management.

Performance and Risk

So far this year, FUTY has gained about 9.88%, and was up about 17.06% in the last one year (as of 05/20/2025). During this past 52-week period, the fund has traded between $43.67 and $53.38.

The ETF has a beta of 0.59 and standard deviation of 18.34% for the trailing three-year period, making it a medium risk choice in the space. With about 69 holdings, it effectively diversifies company-specific risk.

Alternatives

Fidelity MSCI Utilities Index ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, FUTY is a great option for investors seeking exposure to the Utilities/Infrastructure ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.

Vanguard Utilities ETF (VPU) tracks MSCI US Investable Market Utilities 25/50 Index and the Utilities Select Sector SPDR ETF (XLU) tracks Utilities Select Sector Index. Vanguard Utilities ETF has $6.98 billion in assets, Utilities Select Sector SPDR ETF has $19 billion. VPU has an expense ratio of 0.09% and XLU charges 0.08%.

Bottom Line

To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.

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This article originally published on Zacks Investment Research (zacks.com).

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