When it comes to ETF investing, some investors may enjoy tactical moves in and out of certain funds. Others, however, aim to build on long-term holds. While core funds tend to play the latter role, with satellite funds the former, certain sector, satellite-type ETFs can play the long-term performer role. Amid rising volatility, adding that kind of fund to an overall portfolio could offer the boost investors are looking for. The energy ETF FENY may present itself as just the type of fund to fill that role.
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The Fidelity MSCI Energy Index ETF (FENY ) charges the relatively low fee of 8.4 basis points for its services. The energy ETF tracks the MSCI USA IMI Energy 25/50 Index, holding many of the world’s largest oil producers. While that means the fund tends to perform in line with energy prices, over the long term, it has produced some notable performance.
Energy ETF Investing
For example, the energy ETF has returned 15.9% over the last five years, according to Fidelity Investments data as of January 31. The fund returned 14.8% over the last three years as well. Both of those returns outperformed the broader market as defined by the S&P 500, per Fidelity Investments data.
What might be the fund’s forward outlook, then? Could it continue to play a long-term role? The new U.S. administration may perhaps reemphasize policies to benefit oil companies. What’s more, while this winter was warmer in Europe due to climate change, next winter could return to previous cold temperatures. Looking ahead, even with peaks and valleys, an energy ETF like FENY could provide a solid investing case.
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