Launched on 10/21/2013, the Fidelity MSCI Financials Index ETF (FNCL) is a passively managed exchange traded fund designed to provide a broad exposure to the Financials - Broad segment of the equity market.

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.

Investor-friendly, sector ETFs provide many options to gain low risk and diversified exposure to a broad group of companies in particular sectors. Financials - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 5, placing it in top 31%.

Index Details

The fund is sponsored by Fidelity. It has amassed assets over $1.54 billion, making it one of the larger ETFs attempting to match the performance of the Financials - Broad segment of the equity market. FNCL seeks to match the performance of the MSCI USA IMI Financials Index before fees and expenses.

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

Costs

Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.

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

It has a 12-month trailing dividend yield of 1.84%.

Sector Exposure and Top Holdings

ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.

This ETF has heaviest allocation in the Financials sector--about 100% of the portfolio.

Looking at individual holdings, Berkshire Hathaway Inc Cl B Common Stock Usd.0033 (BRK.B) accounts for about 7.87% of total assets, followed by Jpmorgan Chase + Co Common Stock Usd1.0 (JPM) and Visa Inc Class A Shares Common Stock Usd.0001 (V).

The top 10 holdings account for about 43.24% of total assets under management.

Performance and Risk

So far this year, FNCL has added about 3.87%, and is up about 9.64% in the last one year (as of 02/21/2024). During this past 52-week period, the fund has traded between $43.18 and $56.10.

The ETF has a beta of 1.10 and standard deviation of 20.31% for the trailing three-year period, making it a medium risk choice in the space. With about 415 holdings, it effectively diversifies company-specific risk.