Looking for broad exposure to the Technology - Broad segment of the equity market? You should consider the Fidelity MSCI Information Technology Index ETF (FTEC), a passively managed exchange traded fund launched on 10/21/2013.
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.
Sector ETFs also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. Technology - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 2, placing it in top 13%.
Index Details
The fund is sponsored by Fidelity. It has amassed assets over $13.19 billion, making it one of the largest ETFs attempting to match the performance of the Technology - Broad segment of the equity market. FTEC seeks to match the performance of the MSCI USA IMI Information Technology Index before fees and expenses.
The MSCI USA IMI Information Technology Index represents the performance of the information technology 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 0.60%.
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 Information Technology sector--about 99.90% of the portfolio.
Looking at individual holdings, Nvidia Corp Common Stock Usd.001 (NVDA) accounts for about 15.94% of total assets, followed by Apple Inc Common Stock Usd.00001 (AAPL) and Microsoft Corp Common Stock Usd.00000625 (MSFT).
The top 10 holdings account for about 58.62% of total assets under management.
Performance and Risk
So far this year, FTEC has added about 31.10%, and is up about 35.80% in the last one year (as of 12/11/2024). During this past 52-week period, the fund has traded between $137.10 and $191.73.
The ETF has a beta of 1.15 and standard deviation of 25.62% for the trailing three-year period, making it a medium risk choice in the space. With about 297 holdings, it effectively diversifies company-specific risk.
Alternatives
Fidelity MSCI Information Technology Index ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, FTEC is an excellent option for investors seeking exposure to the Technology ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
Technology Select Sector SPDR ETF (XLK) tracks Technology Select Sector Index and the Vanguard Information Technology ETF (VGT) tracks MSCI US Investable Market Information Technology 25/50 Index. Technology Select Sector SPDR ETF has $73.19 billion in assets, Vanguard Information Technology ETF has $84.56 billion. XLK has an expense ratio of 0.09% and VGT charges 0.10%.
Bottom Line
To 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.
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Fidelity MSCI Information Technology Index ETF (FTEC): ETF Research Reports
Apple Inc. (AAPL) : Free Stock Analysis Report
Microsoft Corporation (MSFT) : Free Stock Analysis Report
NVIDIA Corporation (NVDA) : Free Stock Analysis Report
Technology Select Sector SPDR ETF (XLK): ETF Research Reports
Vanguard Information Technology ETF (VGT): ETF Research Reports
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
