Fidelity MSCI Real Estate Index ETF

Fidelity MSCI Real Estate Index ETF (FREL) tracks the MSCI USA IMI Real Estate 25/25 Index, a basket of US real estate companies led by Welltower, Prologis and Equinix. Its expense ratio of 0.084% works out to about $9 a year on $10,000, compared with a 0.21% average for similar funds. It had a trailing yield of 3.46%, paid quarterly, as of October 27, 2026.

• Over the year to Oct 27, 2026, FREL returned +3.2%, 8th of 9 among similar funds.
• Its 5-year annualized return was +0.6% and its 10-year +5.9%.
• In the 2020 COVID crash it fell 42.6% and regained its old high 12.7 months after the low.
• Its worst full calendar year was 2022 (-26.2%); its best was 2021 (+40.4%).
• The deepest fall in its price history was 42.6% (Feb 14, 2020 to Mar 23, 2020), recovered by Apr 15, 2021.

As of Jul 31, 2026, the fund held 122 securities; the ten largest made up 47.51% of assets.

By sector

• Over the three months to Jul 31, 2026, investors added a net $8.9M (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: -0.54%, +1.81%, +2.54%.

FREL aims to match the performance of the MSCI USA IMI Real Estate 25/25 Index, before fees and expenses. The index starts with the broader MSCI USA IMI Index, which covers large, mid-size and small US companies. It keeps only those classified as real estate under GICS (the Global Industry Classification Standard). That sector covers companies that own, operate or develop offices, hotels, malls, data centers, warehouses, apartments, hospitals, senior living and self-storage properties. The fund must keep at least 80% of its assets in securities from the index.

Fidelity uses representative sampling. That means the fund doesn't have to own every stock in the index. Instead, it holds a sample chosen to match the index on company size, industry weights, return swings, yield and ease of trading. As of July 31, 2026, the fund held 122 companies. The top 10 made up 47.5% of assets. Welltower was 9.1%, Prologis 7.9% and Equinix 5.2%.

A few mechanical points matter. Portfolio turnover was 7%, so the fund trades little. It held a small real estate futures position, about 0.01% of assets, and 0.29% in cash. Starting December 11, 2025, derivatives like these can count toward the 80% rule. Some real estate investment trusts (REITs) limit how much of their stock one owner can hold. That can stop the fund from buying them and cause its returns to drift from the index.

• FREL charges 0.084% a year, versus an average of 0.21% for the similar funds below (3rd of 9, cheapest first).
• Using the prospectus's standard example, $10,000 invested would cost about $9 in the first year and $108 over 10 years (assuming a 5% annual return).

FREL holds only real estate companies, whose returns have moved only loosely with the broad stock market, so it fits best as a smaller holding next to core funds.

FREL adds landlords that own healthcare, warehouse, data center, retail and storage properties. Its one-year beta was 0.26 as of October 27, 2026. Beta measures how much a fund moves with the overall market, so 0.26 means a fairly loose link. The trailing yield was 3.46% ($0.97 per share), paid quarterly, and the 0.084% expense ratio is low. Downturns are the main concern. The fund launched in 2015, so it has no 2008 record. It fell 42.6% in early 2020 and took about 13 months to recover. In the 2022 bear market it dropped 31.8% and didn't regain its peak until June 2026, about 44 months later. Its worst calendar year was 2022, at -26.2%. Anyone selling shares in a year like that would have sold well below the peak. Past results don't predict future ones. A plan should look at the whole portfolio, not one fund.

Matched by holdings overlap from the latest N-PORT reports.