Becoming an Investor

Investing in an Economic Recovery with Fidelity MSCI Industrials ETF

This member of the Kiplinger ETF 20 holds more than 330 stocks, including top weightings in railroad Union Pacific and United Parcel Service.

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.

Graphic of performance metrics for Fidelity MSCI Industrials Index ETF

As of November 6. *Assumes reinvestment of dividends and capital gains. —Not applicable; fund not in existence for the entire period. Sources: Direxion, Morningstar, Yahoo Finance.

Most Popular

11 Good Reasons to Cancel Amazon Prime
Budgeting

11 Good Reasons to Cancel Amazon Prime

You probably aren't using most of the perks tucked into that $119 annual fee -- which you don't need to pay to get the free Amazon shipping you crave.
April 13, 2021
Who Should Return Their Third Stimulus Check to the IRS?
Coronavirus and Your Money

Who Should Return Their Third Stimulus Check to the IRS?

Some people who receive a third stimulus check are required to send it back to the IRS. Others can return it voluntarily.
April 12, 2021
2021 Child Tax Credit Calculator
Tax Breaks

2021 Child Tax Credit Calculator

See how much money you'll get in advance under the new child tax credit rules for 2021.
April 14, 2021

Recommended

ETFs vs. Mutual Funds: Why Investors Who Hate Fees Should Love ETFs
ETFs

ETFs vs. Mutual Funds: Why Investors Who Hate Fees Should Love ETFs

Exchange-traded funds offer a huge cost savings to consumers over mutual funds. Here’s why, and a couple of quirks about ETFs to watch out for as well…
April 10, 2021
9 E-Commerce ETFs for the Future of Digital Spending
ETFs

9 E-Commerce ETFs for the Future of Digital Spending

'Return to normal' or not, digital commerce should continue to be a rewarding investment trend for many years to come. These e-commerce ETFs help you …
April 6, 2021
The Space (ETF) Race: UFO, ROKT and ARKX
ETFs

The Space (ETF) Race: UFO, ROKT and ARKX

The blossoming space industry already has prompted a handful of space-themed ETFs. But UFO, ROKT and ARKX are three distinctly different products.
March 30, 2021
The 25 Best Low-Fee Mutual Funds You Can Buy
mutual funds

The 25 Best Low-Fee Mutual Funds You Can Buy

The key to building wealth long-term is buying high-quality, low-cost mutual funds run by seasoned stock pickers. Here are our favorites: The Kiplinge…
March 27, 2021