With escalating geopolitical tensions and unfavorable inflation trends in the U.S., increasing exposure to defensive sectors emerges as a smart investment strategy to navigate the potentially uncertain economic landscape of 2025.
Designed to provide broad exposure to the Utilities - Broad segment of the equity market, the Fidelity MSCI Utilities Index ETF (FUTY) is a passively managed exchange traded fund launched on 10/21/2013.
Fidelity MSCI Utilities Index ETF has outperformed the S&P 500 in 2024, due to macroeconomic uncertainty and expectations of a lower rate environment. Despite improving long-term growth due to AI-driven electricity demand, FUTY's growth outlook still lags behind the S&P 500 for 2025 and 2026. The Fund's valuation is currently rich, with a forward P/E ratio much higher than the historical average, suggesting caution.
These ETF sectors have been hovering around a 52-week high post Fed rate cut.
Looking for broad exposure to the Utilities - Broad segment of the equity market? You should consider the Fidelity MSCI Utilities Index ETF (FUTY), a passively managed exchange traded fund launched on 10/21/2013.
With the markets recently experiencing a sharp sell-off which may have dampened investor confidence, increasing bets that the U.S. economy may slip into a recession increases the need to safeguard investor portfolios with defensive bets.
Monthly article series presents industry metrics in utilities. Utilities are close to 11-year averages in valuation metrics, and quality is over the historical baseline in all subsectors. Fidelity MSCI Utilities Index ETF is an equivalent to XLU for long-term investors.
Designed to provide broad exposure to the Utilities - Broad segment of the equity market, the Fidelity MSCI Utilities Index ETF (FUTY) is a passively managed exchange traded fund launched on 10/21/2013.
The FUTY ETF performed well in Q2, with AI rubbing off on the power-producing sector. The fund offers a high dividend yield, and its low expense ratio and solid liquidity make it suitable for long-term investors seeking US sector exposure. FUTY's technical view is mixed, however, with potential support at $43 and resistance at $47-$48.
Utility is one of the hottest plays this year, driven by the artificial intelligence (AI) frenzy, and is outperforming the broad market index. Investors seeking to make the most of the next leg in the AI industrial revolution could consider utility ETFs.