Fidelity MSCI Utilities Index ETF (FUTY) Covered Calls

The Fidelity MSCI Utilities Index ETF (FUTY) is a cost-efficient, passively managed fund tracking the MSCI USA IMI Utilities 25/50 Index. It provides broad exposure to the U.S. utilities sector, including electric, gas, and water companies, as well as independent power producers. With an industry-leading low expense ratio, FUTY is a primary vehicle for investors seeking defensive equity exposure and consistent dividend yield across the full market-cap spectrum.

You can sell covered calls on Fidelity MSCI Utilities Index ETF to lower risk and earn monthly income. Born To Sell's covered call screener gives you customized search capabilities across all possible covered calls but here are a couple of examples for FUTY (prices last updated Fri 4:16 PM ET):

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The Fidelity MSCI Utilities Index ETF (FUTY) is a cost-effective investment vehicle designed to provide broad exposure to the United States utilities sector. The fund tracks the MSCI USA IMI Utilities 25/50 Index, a market-cap-weighted benchmark that includes large, mid, and small-cap companies. This "all-cap" approach allows FUTY to capture the stability of massive regulated utility giants alongside the growth potential of smaller, independent power producers and specialized water or gas distributors.

The fund employs a representative sampling indexing strategy, meaning it invests in a representative sample of securities that collectively match the investment profile of the underlying index. To maintain regulatory diversification, the 25/50 capping methodology ensures that no single issuer exceeds 25% of the fund’s assets and that the sum of all issuers with a weight greater than 5% does not exceed 50% of the total. This structure provides a balanced look into the essential service providers that form the backbone of U.S. energy and water infrastructure.

Core Business and Products

The core "product" of FUTY is a diversified equity portfolio of approximately 65 holdings. The fund is heavily weighted toward Electric Utilities, which typically make up over 60% of the portfolio, followed by Multi-Utilities and Independent Power and Renewable Electricity Producers. Major holdings include industry leaders such as NextEra Energy, Southern Company, and Duke Energy. The portfolio also features significant positions in clean energy and infrastructure leaders like Constellation Energy and Vistra Corp.

Competitive Landscape

The utilities ETF sector is a staple for income-seeking and defensive investors, characterized by competition between high-liquidity broad sector funds. FUTY competes primarily on its industry-leading low expense ratio and its broader reach into small-cap utility firms. Key optionable competitors in the utilities space include:

1. Utilities Select Sector SPDR Fund: The largest and most liquid utilities ETF, focusing exclusively on S&P 500 components and serving as the primary institutional benchmark.
2. Vanguard Utilities ETF: A primary rival that tracks a similar broad MSCI index and competes directly with FUTY on cost and diversification.
3. iShares U.S. Utilities ETF: Provides broad exposure to the sector and maintains a functional options chain for tactical positioning.
4. Consumer Staples Select Sector SPDR Fund: While in a different sector, XLP is a primary "defensive" peer often used alongside or in place of utilities during risk-off market cycles.
5. Invesco S&P 500 Equal Weight Utilities ETF: An alternative that eliminates the heavy concentration in mega-cap names like NextEra, providing an equal-weighted view of the sector.

Strategic Outlook and Innovation

The strategic outlook for FUTY is increasingly influenced by the "Electrification of Everything" and the surge in power demand from AI data centers. While utilities are traditionally viewed as slow-growth "bond proxies," the massive capital expenditure required for grid modernization and renewable integration has introduced a growth component to the sector. Constituent companies are pivoting toward carbon-free generation and digital "smart grids" to enhance reliability and meet aggressive ESG targets.

Innovation within the sector is currently driven by energy storage technology and small modular reactors (SMRs). Companies in the FUTY portfolio, such as Constellation Energy, are at the forefront of the nuclear renaissance, while others are deploying large-scale battery systems to stabilize intermittent wind and solar inputs. Furthermore, the use of AI for predictive grid maintenance and load balancing is becoming a standard operational efficiency tool. FUTY’s broad-based indexing ensures that investors are exposed to both the traditional regulated income of the sector and the innovative firms driving the future of U.S. energy independence.

Want more examples? FUTU Covered Calls | FV Covered Calls