FUTY ETF: What Is It? A Complete Guide to Returns, Expense Ratio, Holdings, and Alternative ETFs
A passive ETF that tracks the broad US utilities sector at a low expense ratio. A tool for diversifying into the defensive sector, covering electric, gas, and water companies.
SubscribeWhat Is This ETF?
This ETF tracks the MSCI USA IMI Utilities 25/50 Index, a US utilities sector index calculated by MSCI. It holds electric, gas, and water infrastructure companies on a market-cap-weighted basis and uses an expanded index construction that includes everything from large caps to small caps.
It suits medium- to long-term investors who want to diversify into a defensive sector or seek stable dividend income.
Fidelity launched it in 2013 as a passively managed (index-tracking) ETF.
How Does It Invest?
| Item | Details |
|---|---|
| Tracked index | MSCI USA IMI Utilities 25/50 Index |
| Management style | Passive (index tracking) |
| Rebalancing frequency | Quarterly |
| Dividend frequency | Quarterly |
| Total expense ratio | 0.08% |
It holds companies in the US utilities sector using an expanded index approach that spans large caps to small caps. It is market-cap weighted, but applies the 25/50 rule to limit single-stock concentration and maintain diversification.
- Expanded index construction covering large-, mid-, and small-cap utility companies
- Low expense ratio within its category
Size and Costs
Assets under management (AUM) stand at $2.0B, and the total expense ratio is 0.08% per year.
Its expense ratio is on the low side compared with XLU and VPU, which track the same utilities sector. Because the tracked index uses an expanded construction, it also includes some small and mid-sized utility companies, so it holds somewhat more stocks than XLU.
Performance and Trends
1-Year Price Performance
Dividend & Yield
52-Week Price RangeThe utilities sector tends to be relatively weak during rate-hike phases, as it becomes less attractive as a bond substitute. When expectations of rate cuts grow, its dividend yield advantage stands out and fund inflows tend to increase.
When recession concerns rise, money tends to move into defensive sectors, which shows up across utilities ETFs. Growing investment in power infrastructure and discussion of rising electricity demand from AI data centers have also drawn attention.
Pros and Cons
Its low expense ratio and defensive sector characteristics are strengths, while interest rate swings and sector concentration risk should be considered together.
💪 Key Strengths
⚠️ Points to Watch
Alternative ETFs and Related Products
XLU, shown in the table, is a leading peer ETF tracking the same utilities sector and offers high liquidity, while VPU is a direct, low-cost alternative managed by Vanguard. IDU is iShares' utilities ETF and follows a similar strategy. Among options not in the table, UTES, which adds an actively managed element, is also worth considering.
Peer Comparison ETFs| Ticker | Name | Price | Change | AUM | Total Expense Ratio | Dividend Yield | 1Y |
|---|---|---|---|---|---|---|---|
 XLU | State Street Utilities Select Sector SPDR ETF | $43.13 | -0.4% | $23.9B | 0.08% | 2.81% | -2.5% |
 VPU | Vanguard Utilities ETF | $186.52 | -0.2% | $8.1B | 0.09% | 2.79% | -2.8% |
 IDU | iShares U.S. Utilities ETF | $110.43 | -0.3% | $1.4B | 0.37% | 2.34% | -0.7% |
 UTES | Virtus Reaves Utilities ETF | $75.12 | +2.2% | $1.1B | 0.49% | 1.62% | -8.8% |
 FXU | First Trust Utilities AlphaDEX Fund | $47.98 | -0.8% | $754.6M | 0.61% | 2.34% | +3.9% |
Top Holdings| Ticker | Name | Weight | Price | Change | Market Cap | P/E | Dividend Yield |
|---|---|---|---|---|---|---|---|
| NEE | NextEra Energy Inc | 0.24% | $86.95 | -1.5% | $182.4B | 15.7 | 2.86% |
| SO | Southern Company | 0.07% | $92.34 | -1.1% | $106.2B | 21.1 | 3.29% |
| SCCO | Southern Copper Corp | 0.07% | $167.27 | +1.1% | $142.7B | 22.4 | 2.57% |
| DUK | Duke Energy Corp | 0.13% | $127.78 | -1.8% | $99.6B | 18.7 | 3.41% |
| CEG | Constellation Energy Corp | 0.11% | $249.95 | +4.3% | $88.6B | 24.3 | 0.68% |
| AEP | American Electric Power Company Inc | 0.09% | $126.53 | -0.2% | $68.9B | 20.7 | 3.03% |
Investor Checkpoints
Here are the points to review before investing in FUTY. The utilities sector has defensive characteristics, but it is important to understand key risk factors in advance, such as interest rate changes, the regulatory environment, and exchange rates.
| Checkpoint | What to Check | Current Status |
|---|---|---|
| 💵 Expense ratio | Check the effect of cumulative costs over a long holding period | Remains low |
| 📈 Interest rate environment | Understand how the current rate direction affects the utilities sector | Needs checking |
| 💧 Liquidity | Check daily trading value and bid-ask spread levels | Lower than peer ETFs |
| 💱 Exchange rate | As a dollar-denominated ETF, returns converted to won are affected | No currency hedge |
During rate-hike phases, dividend stocks and the utilities sector as a whole can come under selling pressure. Because of its single-sector concentration, there are periods when it moves in a different direction from the broader market, and changes in the regulatory environment are also a medium- to long-term risk factor.
It is a suitable choice for investors who want to diversify into the US utilities sector at a low expense ratio. If you want to build a defensive portfolio or earn dividend income, compare it with XLU and VPU before choosing.
SubscribeDisclaimer: This content is for informational purposes only and does not constitute investment advice. All investment responsibility lies with the investor.
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