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Looking for broad exposure to the Financials - Broad segment of the equity market? You should consider the Fidelity MSCI Financials Index ETF (FNCL), a passively managed exchange traded fund launched on 10/21/2013.
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are 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 1, placing it in top 6%.
Index Details
The fund is sponsored by Fidelity. It has amassed assets over $2.25 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
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 one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.44%.
Sector Exposure and Top Holdings
Even 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, Jpmorgan Chase + Co Common Stock Usd1.0 (JPM) accounts for about 9.17% 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 44.92% of total assets under management.
Performance and Risk
So far this year, FNCL has gained about 5.87%, and it's up approximately 29.80% in the last one year (as of 03/04/2025). During this past 52-week period, the fund has traded between $55.60 and $74.17.
The ETF has a beta of 1.08 and standard deviation of 19.08% 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.