FREL: FIDELITY MSCI REAL ESTATE INDEX ETF
ETF Education Report: Fidelity MSCI Real Estate Index ETF (FREL)
What this ETF is trying to do
The Fidelity MSCI Real Estate Index ETF (FREL) is an exchange-traded fund that focuses on the real estate industry. Instead of buying just one building or one company, this ETF holds many different companies involved in real estate. This helps investors gain exposure to a wide variety of properties through a single investment.
What the numbers show
When looking at how this ETF has performed, it is important to understand two different types of returns: price return (how much the share price changed) and total return (which includes both price changes and cash distributions).
• Year-to-Date (YTD): The price return is up approximately 3.87%. When you include distributions, the YTD total return is approximately 6.72%.
• One Year: The one-year price return was a slight decline of approximately -0.32%. However, the one-year total return was positive at approximately 4.09%.
• Three Year: Over the last three years, the price return was approximately 15.75%, while the total return was approximately 28.66%.
To give you an idea of price movement, the current price is $27.93. The estimated price from roughly one year ago was $28.02.
Income and distribution explanation
This ETF provides cash to investors through distributions. The distribution yield is approximately 4.29%. This number represents the cash paid out relative to the ETF's price. Over the last 12 months, there were 5 payouts, which usually happen on a quarterly basis. It is important to remember that a high distribution yield is not the same as total return, and receiving cash does not guarantee that your original investment will stay the same value.
NAV erosion explanation
"NAV erosion" refers to a decline in the Net Asset Value (the actual value of the assets held by the fund). While a falling share price can sometimes look like erosion, they are not always the same thing. For this ETF, the erosion-risk score is 94, which is labeled as "Stable / sideways." The erosion severity is rated as "good," and there is no severe erosion-risk flag present.
Top Holdings
The following are some of the largest companies held by this ETF (note that this is a partial list):
• Welltower Inc: 9.61%
• Prologis Inc: 7.82%
• Equinix Inc: 5.75%
• American Tower Corp: 4.64%
• Simon Property Group Inc: 4.40%
• Digital Realty Trust Inc: 4.10%
• Realty Income Corp: 3.41%
Pros
• The ETF has a history of positive total returns over one, three, and five-year periods.
• It provides regular cash distributions.
Cons
• The one-year price return has shown a slight decline.
Beginner takeaway
When looking at FREL, it is helpful to distinguish between the share price and the total return. While the share price may move up or down, the total return accounts for the extra cash paid out to investors. Always remember that high yields are not a guarantee of overall profit.
Top Holdings
Structured portfolio holdings supplied by the ETF data provider. These figures are not generated by the AI article.
| # | Holding | Ticker | Weight |
|---|---|---|---|
| 1 | WELLTOWER INC | WELL | 9.56% |
| 2 | PROLOGIS INC | PLD | 7.69% |
| 3 | EQUINIX INC | EQIX | 5.92% |
| 4 | AMERICAN TOWER CORP | AMT | 4.67% |
| 5 | SIMON PROPERTY GROUP INC | SPG | 4.41% |
| 6 | DIGITAL REALTY TRUST INC | DLR | 4.22% |
| 7 | REALTY INCOME CORP | O | 3.38% |
| 8 | PUBLIC STORAGE | PSA | 3.33% |
| 9 | VIVMARK RESIDENTIAL | VMRK | 3.01% |
| 10 | CBRE GROUP INC CLASS A | CBRE | 2.65% |