Investing in sectors with passive ETFs

Fidelity helped to pioneer sector investing in 1981 when it launched its first actively managed sector fund. Today, Fidelity's lineup of sector products includes a suite of exchange traded funds (ETFs) that covers all 11 sectors of the U.S. equity market.

Featured Resources

Featured Fund

Fidelity MSCI Communication Services Index ETF

Now includes companies from the information technology and consumer discretionary sectors.

Fidelity sector ETFs are indexed to the MSCI® USA Investable Market Index (IMI) Sector Indices. These indices include large-, mid-, and small-cap U.S. stocks covering up to 99% of the free-float-adjusted market capitalization of the U.S. equity market. All securities in the indices are classified in the corresponding sector according to the Global Industry Classification Standard (GICS®) framework.

Key features of passive ETFs

Flexibility

ETFs trade like stocks on an exchange. You can:

  • Buy and sell shares throughout the day1
  • See current market prices anytime during the day
  • Set stop, limit, and other order types

Costs

Expense ratios for many passive ETFs are low compared to actively managed investment options.2 ETFs that track indices have:

  • Low fund turnover that generally results in minimal transaction costs
  • Fewer capital gains, and capital gains that are realized only upon sale of shares
  • Fidelity has among the lowest-priced sector ETFs available, with an expense ratio of just 0.084%.2

Transparency

Passive ETFs typically publish holdings and their weights daily. This information may help you:

  • Know the positions and their weights in the ETF and the index
  • Identify overlap across your portfolio
  • Limit strategy drift

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