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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.
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
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 1, placing it in top 6%.
Index Details
The fund is sponsored by Fidelity. It has amassed assets over $2.07 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.
Costs
Since 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 1.52%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. 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, Jpmorgan Chase + Co Common Stock Usd1.0 (JPM) accounts for about 8.47% of total assets, followed by Berkshire Hathaway Inc Cl B Common Stock Usd.0033 (BRK.B) and Visa Inc Class A Shares Common Stock Usd.0001 (V).
The top 10 holdings account for about 43.06% of total assets under management.
Performance and Risk
Year-to-date, the Fidelity MSCI Financials Index ETF has added roughly 0% so far, and is up about 30.21% over the last 12 months (as of 01/02/2025). FNCL has traded between $52.62 and $73.31 in this past 52-week period.
The ETF has a beta of 1.09 and standard deviation of 19.57% for the trailing three-year period, making it a medium risk choice in the space. With about 409 holdings, it effectively diversifies company-specific risk.