2025 has, for many investors, been the tale of two markets. The start of the year saw new policy decisions and the first brush with tariffs. That sent the S&P 500 into a spring dip. Since then, however, the key index has recovered and risen above its 2025 starting point in January. That brighter second half may yet hide further volatility to come, however. Myriad risks still may create some market turbulence to watch; a low vol equities ETF can help.
See more: Building a Diversified Portfolio With Fidelity ETFs: A Step-by-Step Guide
Some investors may think all low vol equities ETFs must adopt a complicated options approach to meet their goals. But simpler approaches can deliver similar or better results. Investing into equities sectors with inherently lower volatility can also produce steady performance less impacted by wild market swings.
Low Vol Equities ETF FUTY
One low vol equities area that merits a closer look may be utilities. The Fidelity MSCI Utilities Index ETF (FUTY ), for example, has performed very well with a focus on a low vol segment. The ETF charges just 8.4 basis points to track the MSCI USA IMI Utilities 25/50 Index. The utilities category isn’t just known for its traditionally low volatility but also its healthy distribution yields.
Some investors already have a degree of utilities exposure via dividend funds and some other equities approaches. FUTY provides a specific focus therein. The strategy has added almost half a billion dollars in net inflows over the last one-year period, per ETF Database data. It has returned 17% YTD at the same time, beating both its ETF Database Category and FactSet Segment averages.
Intriguingly, that performance didn’t just come as investors flocked to defensive stocks; the low vol equities ETF has also done well in the last month. FUTY returned 6.65% over the last month, per ETF Database, beating both its averages in that time, too. Looking forward, the utilities ETF’s steady outperformance could make for a worthy slice to add to investor portfolios.
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Fidelity Investments® is an independent company unaffiliated with VettaFi LLC (“VettaFi”). These articles do not form any kind of legal partnership, agency affiliation, or similar relationship between VettaFi and Fidelity Investments, nor is such a relationship created or implied by the articles herein. VettaFi LLC is the author and owner of these articles.
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