If you believe in America’s ability to recover from the one-two punch of the pandemic and ensuing recession, you should have faith in the industrial sector. Railways, large-equipment manufacturers, delivery services and the like are poised to wake from their 2020 slumber. The industrial sector suffered a 6.9% loss through the end of October, but then bounced higher on hopes of a vaccine-propelled rebound in economic growth and possibly increased infrastructure spending.
Fidelity MSCI Industrials Index ETF (FIDU), a member of the Kiplinger ETF 20 list of our favorite ETFs, isn’t the oldest fund invested in the sector, nor is it the largest. But charging just $8 annually for each $10,000 invested, it is the cheapest. And that eight bucks a year buys you a robust, diversified portfolio. FIDU holds more than 330 stocks, including top weightings in railroad Union Pacific (UNP), diversified conglomerate Honeywell (HON) and United Parcel Service (UPS).
Many holdings are large, global operators that could enjoy the benefits of economic snapbacks across the world, especially in resurgent China. However, FIDU could be an especially potent performer as the U.S. economy gets back on track. Midsize and small companies, which are likely to derive more of their revenues domestically, make up a larger percentage of the Fidelity fund’s portfolio than they do in many of its biggest competitors. The tilt toward smaller companies provides a “growthier” edge for the ETF, which nonetheless offers investors below-average risk, according to investment research firm Morningstar.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
-
Stock Market Today: Stocks Pause but Nvidia Hits New All-Time HighsThe major equity indexes were mostly mixed on Monday, but Nvidia hit yet another new all-time high.
-
Mark Cuban, Kamala Harris, and Taxing Unrealized GainsUnrealized Gains Some warn that taxing unrealized gains could devastate the economy, but are those fears realistic?
-
6 Best Books on Investinginvesting These six books will help you be a better investor.
-
Bond Basics: Zero-Coupon Bondsinvesting These investments are attractive only to a select few. Find out if they're right for you.
-
Bond Basics: How to Reduce the Risksinvesting Bonds have risks you won't find in other types of investments. Find out how to spot risky bonds and how to avoid them.
-
What's the Difference Between a Bond's Price and Value?bonds Bonds are complex. Learning about how to trade them is as important as why to trade them.
-
Bond Basics: U.S. Agency Bondsinvesting These investments are close enough to government bonds in terms of safety, but make sure you're aware of the risks.
-
Bond Ratings and What They Meaninvesting Bond ratings assess the creditworthiness of your bond issuer, can help limit your risk of default and maximize yield.
-
Bond Basics: U.S. Savings Bondsinvesting U.S. savings bonds are a tax-advantaged way to save for higher education.
-
Bond Basics: Treasuriesinvesting Understand the different types of U.S. treasuries and how they work.
