One of the biggest news items in the exchange trade products business this week was the debut of 10 sector ETFs from financial services giant Fidelity.
And part of the big story there is that Fidelity is now the low-cost leader when it comes to sector ETFs. Not only can Fidelity clients trade the firm’s 10 new ETFs commission-free, but the funds charge a paltry 0.12% per year in fees, which is even cheaper than the 0.14% charged by Vanguard on most of its sector funds. [Fidelity Sector Funds Could Alter ETF Landscape]
There are similarities between the Fidelity sector ETFs and established offerings from State Street Global Advisors and Vanguard.
In this slideshow, we highlight the average weight of the largest stock in the sector ETFs from all three providers and whether investors would have been better served with the SPDR ETF or the largest holding this year.
A couple of notes. First, telecom was excluded because there is not a true SPDR for that sector. Second, Amazon (NasdaqGM: AMZN) is not the largest stock in the SPDR discretionary ETF, but it is in the Vanguard and Fidelity equivalents, so we chose it as our measuring stick for that sector here.
Consumer Staples
ETFs: Consumer Staples Select Sector SPDR (NYSEArca: XLP), Vanguard Guard Consumer Staples ETF (NYSE: VDC) and Fidelity MSCI Consumer Staples ETF (NYSEArca: FTSA).
Average Weight to Procter & Gamble (NYSE: PG): 12.9%.
Better XLP or P&G shares: XLP by a hair.
Financial Services
ETFs: Financial Select Sector SPDR (NYSEArca: XLF), Vanguard Financial Services ETF (NYSEArca: VFH) and Fidelity MSCI Financials Index ETF (NYSEArca: FNCL).
Average weight to Wells Fargo (NYSE: WFC): 7%.
Better XLF or Wells Fargo: XLF, but only slightly.
Industrials
ETFs: Industrial Select Sector SPDR (NYSEArca: XLI), Vanguard Industrials ETF (NYSEArca: VIS) and the Fidelity MSCI Industrial Index ETF (NYSEArca: FIDU).
Average weight to General Electric (NYSE: GE): 11.9%
Better XLI or GE: XLI.
Health Care
ETFs: Healthcare Select Sector SPDR (NYSEArca: XLV), Vanguard Health Care ETF (NYSEArca: VHT) and Fidelity MSCI Health Care Index ETF (NYSEArca: FHLC).
Average weight to Johnson & Johnson (NYSE: JNJ): 11%
Better XLV or J&J: Basically a tie this year.
Technology
ETFs: Technology Select Sector SPDR (NYSE: XLK), Vanguard Information Technology ETF (NYSEArca: VGT) and the Fidelity MSCI Information Technology ETF (NYSEArca: FTEC).
Average weight to Apple (NasdaqGS: AAPL): 14.3%.
Better XLK or Apple: XLK and it is not even close.
Consumer Discretionary
ETFs: Consumer Discretionary Select Sector SPDR (NYSEArca: XLY), Vanguard Consumer Discretionary ETF (NYSEArca: VCR) and Fidelity MSCI Consumer Discretionary Index ETF (NYSEArca: FDIS).
Average weight to Amazon: 5.5%
Better XLY or Amazon: Nearly a tie this year.
Energy
ETFs: Energy Select Sector SPDR (NYSEArca: XLE), Vanguard Energy ETF (NYSEArca: VDE) and the Fidelity MSCI Energy Index ETF (NYSEArca: FENY).
Average weight to Exxon Mobil (NYSE: XOM): 19.2%.
Better XLE or Exxon: XLE by a significant margin.
Materials
ETFs: Materials Select Sector SPDR (NYSEArca: XLB), Vanguard Materials ETF (NYSEArca: VAW) and Fidelity MSCI Materials Index ETF (NYSEArca: FMAT).
Average weight to Monsanto (NYSE: MON): 9%.
Better XLB or Monsanto: XLB by 300 basis points.
Utilities
ETFs: Utilities Select Sector SPDR (NYSEArca: XLU), Vanguard Utilities ETF (NYSEArca: VPU) and the Fidelity MSCI Utilities Index ETF (NYSEArca: FUTY).
Average weight to Duke Energy (NYSE: DUK): 8.6%
Better XLU or Duke: Duke by 110 basis points.
Max Chen contributed to this post.