"FUTY tracks the MSCI USA IMI Utilities 25/50 Index, a market-cap-weighted benchmark covering the full U.S. utilities sector, charging an expense ratio of 0.084%. With $2.48 billion in net assets, it has a long enough track record to evaluate through multiple rate cycles."
"The return engine is straightforward: regulated utility businesses earn predictable returns on their rate bases, pass costs through to customers under state-approved agreements, and distribute a large share of earnings as dividends, with a yield near 2.5%."
"Investors buying FUTY as a pure bond proxy are getting something different, as the MSCI utilities index includes competitive merchant power companies alongside regulated utilities, with top holdings operating in deregulated markets."
Fidelity MSCI Utilities Index ETF (FUTY) tracks the MSCI USA IMI Utilities 25/50 Index, featuring a low expense ratio of 0.084%. With $2.48 billion in net assets, it provides exposure to the U.S. utilities sector, including both regulated utility businesses and competitive merchant power companies. The fund's dividend yield is approximately 2.5%, while capital appreciation is influenced by the rate environment. The index's concentration cap limits single issuer exposure, with NextEra Energy being the largest holding at 12.33%. The portfolio includes 65 positions, with significant representation from deregulated market companies.
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