Fidelity's Five Best Dividend ETFs

Fidelity MSCI Telecommunication Services ETF (FCOM )

Based on the MSCI USA IMI Telecommunication Services 25/50 Index, this fund seeks investments in the telecommunication services sector in the U.S. equity market. As of October 30, 2018, the fund had 97% of its $180 million assets distributed across just 21 individual holdings and 3% in cash.

Because of the small number of holdings, the top 10 equities account for more than 73% of total assets. Furthermore, just the top two holdings — Verizon Communications (VZ), 24.43% and AT&T, Inc. (T), 21.38% — take up nearly 46% of total assets. United States-based companies take up 92.5% of assets, with Germany and Japan contributing the remaining shares.

The fund’s current annual distributions yield 2.9%. Additionally, the unit price recovered from a 10% mid-year drop to deliver a marginal gain of 1% over the trailing 12 months. The combined total return for the past year was nearly 4%, with longer-term total returns of 26% over the past three years and more than 38% over the last five years.

Fidelity MSCI Utilities Index ETF (FUTY )

Using a representative sampling indexing strategy, the fund’s management invests at least 80% of the fund’s assets in securities included in the MSCI USA IMI Utilities Index. As of October 30, 2018, FUTY’s $425 million of net assets were invested in shares of 68 individual corporations, one limited partnership, and cash.

The regional asset allocation exposure is almost exclusively to U.S. utility companies, with the Canada-based TerraForm Power, Inc. (TERP) and U.K.-based AquaVenture Holdings, Ltd. (WAAS) as the only foreign investments that combined for slightly more than 0.1% of total assets.

Electric utilities account for more than 47% of total assets, with multi-utility companies accounting for an additional 30% share of assets. Independent Power and Renewable Electricity, Gas Utilities and Water Utilities account for the remaining 13% of asset allocations.

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