Fidelity® MSCI Communication Services Index ETF (FCOM)

Overview

The Fidelity MSCI Communication Services Index ETF (FCOM) seeks to provide investment results that correspond to the performance of the MSCI USA IMI Communication Services 25/50 Index, representing the communication services sector in the U.S. equity market. It employs a replication strategy, investing in all or a representative sample of the securities in the underlying index.

Reputation and Reliability

Fidelity is a well-established and reputable financial services company with a long history of managing investment products.

Management Expertise

Fidelity has a large team of experienced investment professionals managing a wide range of ETFs and mutual funds.

Goal

To provide investment results that correspond to the performance of the MSCI USA IMI Communication Services 25/50 Index.

Investment Approach and Strategy

Strategy: The ETF seeks to track the MSCI USA IMI Communication Services 25/50 Index.

Composition The ETF primarily holds stocks of U.S. communication services companies, including those in telecommunication, media, and entertainment industries.

Market Share: FCOM holds a significant market share within the communication services ETF sector, but not the largest.

Total Net Assets (AUM): 521000000

Key Competitors

• Vanguard Communication Services ETF (VOX)
• Communication Services Select Sector SPDRu00ae Fund (XLC)
• iShares U.S. Telecommunications ETF (IYZ)

Competitive Landscape

The communication services ETF market is dominated by XLC. FCOM offers exposure to the sector at a competitive expense ratio, but it faces strong competition from larger and more liquid ETFs like XLC and VOX. FCOM and VOX has a slightly lower expense ratio than XLC.

Historical Performance: Historical performance can be obtained from Fidelity's website, but varies with market conditions.

Benchmark Comparison: The ETF's performance is expected to closely track the MSCI USA IMI Communication Services 25/50 Index. Deviations are typically minimal and due to tracking error.

Expense Ratio: 0.08

Average Trading Volume

The ETF exhibits moderate trading volume, facilitating relatively easy entry and exit for most investors.

Bid-Ask Spread

The bid-ask spread is generally tight, indicating good liquidity and lower trading costs.

Market Environment Factors

The ETF is affected by factors impacting the communication services sector, including technological advancements, regulatory changes, consumer spending, and economic growth.

Growth Trajectory

The growth trajectory of FCOM is dependent on the overall performance and growth prospects of the communication services sector. Trends such as streaming, 5G, and digital advertising drive the sector.

Competitive Edge

FCOM's primary competitive advantage is its low expense ratio of 0.08%, making it an attractive option for cost-conscious investors seeking exposure to the communication services sector. The ETF benefits from Fidelity's brand recognition and distribution network, which can facilitate wider adoption among investors. It offers targeted exposure to the sector, allowing investors to fine-tune their portfolio allocation. The fund's diversification within the communication services sector also reduces the risk of over-concentration in any single company.

Volatility

The ETF's volatility is expected to be similar to that of the broader communication services sector, which can be influenced by factors such as regulatory changes and competition.

Market Risk

The ETF is subject to market risk, meaning that the value of its holdings can decline due to factors such as economic downturns or changes in investor sentiment towards the communication services sector.

Ideal Investor Profile

The ideal investor for FCOM is one seeking targeted exposure to the U.S. communication services sector, potentially as part of a broader portfolio diversification strategy.

Market Risk

The ETF is suitable for long-term investors seeking to track the performance of the communication services sector passively and cost-effectively.

FCOM offers a low-cost and efficient way to gain exposure to the communication services sector in the U.S. equity market. Its investment objective is to closely track the performance of the MSCI USA IMI Communication Services 25/50 Index. Fidelity's expertise and brand recognition provide investors with confidence in the ETF's management. However, investors should consider the ETFu2019s risk profile and expense ratios relative to key competitors before investing. The ETF is suitable for investors seeking long-term capital appreciation in the communication services sector.

Data Sources:

• Fidelity Investments, MSCI, ETF.com, Yahoo Finance

Disclaimers:

The data provided is for informational purposes only and should not be considered investment advice. ETF performance is subject to market risk and can fluctuate. Past performance is not indicative of future results.