Key Points
Fidelity’s FTEC ETF features a diversified basket of well-known internet technology firms.
Moreover, FTEC offers an enticing combination of stability, growth, and dividends.
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Information technology or IT is a dominant theme in the economy of the 2020s. If your portfolio doesn’t have enough exposure to the IT sector, then you’ve got a hole in your wealth-building strategy that needs to be filled.
Extensive research and stock picking is one way to participate in the IT trend of 2025. However, it’s much more convenient to get IT market exposure through an all-in-one exchange traded fund (ETF).
To that end, Fidelity offers a fund known as the Fidelity MSCI Information Technology Index ETF (NYSEARCA:FTEC). So, let’s get to the heart of the matter as there are three crucial reasons this ETF should be every investor’s secret weapon for IT sector coverage.
Tech Exposure with No Waiting
Frankly, there’s no time to waste if you’re missing out on the IT revolution. One reason you need this Fidelity fund is to get immediate exposure to an array of established technology brands — no waiting, no wondering.
What’s in the Fidelity MSCI Information Technology Index ETF, though? This fund tracks the MSCI USA IMI Information Technology 25/50 Index and includes IT names that should be familiar to most people, even if they’re not tech gurus.
It’s hard to imagine the current IT world existing without pioneers like Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT), Cisco Systems (NASDAQ:CSCO), and Oracle (NYSE:ORCL). No need to buy those stocks individually, though, as Fidelity’s FTEC ETF covers all of these IT mainstays and more.
With FTEC, your portfolio will get exposure to a legacy IT trailblazer like International Business Machines (NYSE:IBM) but also to modern standouts like Salesforce (NYSE:CRM) and Palantir Technologies (NYSE:PLTR). From essential IT hardware to the crucial info security sector, Fidelity’s got you covered with this fund.
Now, you won’t ever have to worry about missing out on the IT revolution. At any given time, the prominent IT leader might be Apple or Microsoft or Broadcom (NASDAQ:AVGO). Either way, you’ll be along for the ride with the FTEC ETC.
Ready, Set, Grow!
Another reason to add the Fidelity MSCI Information Technology Index ETF to your investment account is the fund’s amazing growth potential. As long as businesses spend billions of dollars for the latest IT hardware and software, there will be room for FTEC component companies to grow.
If you’re skeptical, just take a look at the five-year chart for the FTEC ETF:
Fidelity’s fund didn’t just beat the S&P 500; it absolutely crushed it. We’re talking about 143% returns in five years for FTEC, and that doesn’t even include dividend payments.
Speaking of which, the Fidelity MSCI Information Technology Index ETF offers a forward annual dividend yield of 0.55%. Granted, that might not sound like a huge yield, but you can grow your wealth over time if you consistently reinvest the dividend distributions into FTEC.
Furthermore, the fund’s growth potential won’t be slowed down too much by its management fees. Currently, the annualized expense ratio for the Fidelity MSCI Information Technology Index ETF is 0.084%.
This equates to around eight and a half cents in management fees you’d have to pay for every $100 invested in FTEC. That’s not excessive at all, and it’s just a small drag on an IT-focused fund with big growth prospects.
Stability Comes from Diversification
Safety-seeking investors might express concerns that Fidelity’s MSCI Information Technology Index ETF will achieve growth but sacrifice stability. That’s understandable, but there’s really no need to worry about this fund’s stability.
For one thing, the Fidelity MSCI Information Technology Index ETF has a five-year monthly beta of 1.26. This is a fancy way of saying that FTEC is only moderately more volatile than the S&P 500, which has a beta of 1.
Yet, there’s an even stronger argument for this fund’s stability. Fidelity’s FTEC ETF comprises 283 stocks in total, so in this regard, it’s more diversified than the NASDAQ 100 or the 30-component Dow Jones Industrial Average.
Having nearly 300 stocks means that the Fidelity MSCI Information Technology Index ETF will stabilize somewhat even if there’s a negative news item surrounding Apple or Microsoft or Salesforce. Truly, this is a broad-based fund that covers the most important IT firms but doesn’t rely too much on any one of them.
This sense of stability should assuage concerned investors while FTEC also slakes the thirst of growth-oriented participants. Thus, for confident exposure to hundreds of top-notch IT market movers, don’t miss out on Fidelity’s MSCI Information Technology Index ETF.
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