Should You Invest in the Fidelity MSCI Financials Index ETF (FNCL)?

The Fidelity MSCI Financials Index ETF (FNCL) was launched on 10/21/2013, and is a passively managed exchange traded fund designed to offer broad exposure to the Financials - Broad segment of the equity market.Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds 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. Financials - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 3, placing it in top 19%.Index DetailsThe fund is sponsored by Fidelity. It has amassed assets over $2.16 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 25/50 Index represents the performance of the financial sector in the U.S. equity market.CostsSince cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.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 1.56%.Sector Exposure and Top HoldingsEven though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that 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 8.92% 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 45.65% of total assets under management.Performance and RiskYear-to-date, the Fidelity MSCI Financials Index ETF has added about 1.56% so far, and was up about 23.89% over the last 12 months (as of 05/05/2025). FNCL has traded between $57.07 and $74.17 in this past 52-week period.The ETF has a beta of 1.01 and standard deviation of 20.14% for the trailing three-year period, making it a medium risk choice in the space. With about 406 holdings, it effectively diversifies company-specific risk.AlternativesFidelity MSCI Financials 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, FNCL is an excellent option for investors seeking exposure to the Financials ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.Vanguard Financials ETF (VFH) tracks MSCI US Investable Market Financials 25/50 Index and the Financial Select Sector SPDR ETF (XLF) tracks Financial Select Sector Index. Vanguard Financials ETF has $12.04 billion in assets, Financial Select Sector SPDR ETF has $50.95 billion. VFH has an expense ratio of 0.09% and XLF charges 0.08%.Bottom LineTo 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.Want key ETF info delivered straight to your inbox?Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.Get it free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Fidelity MSCI Financials Index ETF (FNCL): ETF Research Reports JPMorgan Chase & Co. (JPM): Free Stock Analysis Report Visa Inc. (V): Free Stock Analysis Report Berkshire Hathaway Inc. (BRK.B): Free Stock Analysis Report Financial Select Sector SPDR ETF (XLF): ETF Research Reports Vanguard Financials ETF (VFH): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks