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FREL Fidelity MSCI Real Estate Index ETF

Category: Real Estate

Inception: 2015-02-02 Issuer: Fidelity
Net Assets
$1B
Expense Ratio
0.08 %
# of Holdings
142
Average Daily Volume
225.5K

Fund Overview

The Fidelity MSCI Real Estate Index ETF (FREL) is designed to provide investment results that correspond to the performance of the MSCI USA IMI Real Estate Index. This ETF offers exposure to a broad range of U.S. real estate equities, including real estate investment trusts (REITs) and other real estate-related companies. FREL is passively managed and seeks to replicate the index's performance by holding a diversified portfolio of real estate securities. The fund provides investors with a cost-effective way to gain access to the real estate sector, which can offer income through dividends and potential capital appreciation. FREL is suitable for investors looking to diversify their portfolios with real estate exposure without directly owning physical properties.
Asset Class
Real Estate
Industry
Broad Real Estate
Annual Dividend Rate
Smart Beta
No
Leveraged / Inverse
N/A / No
Dividend Quality - Yield
 - 3.42 %
Currency Hedged
No
Portfolio Turnover
6 %
Dividend Date

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Market Cycle and Economic cycle chart

Why Invest in the FREL ETF?

Potential Benefits

  • Provides diversified exposure to the U.S. real estate sector, including REITs and real estate operating companies.
  • Low expense ratio compared to actively managed real estate funds, making it a cost-efficient investment option.
  • Offers potential for income through dividends, as many REITs distribute a significant portion of their earnings.
  • Passively managed, reducing the risk of underperformance due to active management decisions.
  • Liquidity and ease of trading, as it is an ETF listed on major exchanges.

Potential Risks

  • Exposure to interest rate risk, as rising rates can negatively impact real estate valuations and REIT performance.
  • Sector concentration risk, as the fund is entirely focused on the real estate sector.
  • Market volatility can affect real estate prices and, consequently, the fund's performance.
  • Dividend payments are not guaranteed and can fluctuate based on the underlying holdings' performance.
  • Economic downturns can reduce demand for real estate, impacting rental incomes and property values.

Performance

1 Week 1 Month 1 Year 3 Years 5 Years YTD 2024 2023 Since Inception
+0.11% -0.22% +2.13% +2.98% +30.95% +2.93% +4.10% +11.62% +62.46%

Performance


Histogram
MACD
Signal
Base Line
RSI (14)
Overbought (70)
Oversold (30)

Monthly Returns (%)

Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2025 +1.7% +3.5% -2.4% -2.5% +1.1% +0.9% +0.1% -0.1% - - - -
2024 -5.0% +2.1% +2.0% -8.0% +4.5% +2.0% +7.9% +5.2% +3.3% -3.3% +4.2% -8.2%
2023 +10.4% -6.0% -2.0% +0.4% -4.1% +5.6% +2.0% -3.3% -7.2% -3.6% +12.0% +9.3%
2022 -8.2% -3.7% +6.4% -4.2% -4.6% -7.4% +8.8% -6.1% -12.9% +3.5% +6.0% -5.0%
2021 -0.2% +3.9% +5.2% +7.9% +0.8% +2.5% +4.4% +2.0% -5.6% +7.1% -2.2% +9.7%
2020 +1.2% -7.1% -19.4% +8.8% +1.8% +2.3% +3.7% +0.5% -2.8% -2.9% +9.5% +2.9%
2019 +11.7% +0.7% +4.2% -0.2% +0.2% +1.7% +1.6% +3.7% +1.9% +1.0% -1.3% +0.8%
2018 -3.0% -6.7% +3.5% +0.6% +3.4% +4.1% +0.6% +2.5% -2.7% -2.7% +4.7% -7.9%
2017 0.0% +4.3% -1.6% +0.5% -0.3% +2.1% +1.3% +0.5% -0.7% +0.3% +2.8% -0.4%
2016 -4.1% -0.7% +10.1% -1.6% +2.3% +6.1% +4.1% -3.4% -1.2% -5.3% -2.1% +4.5%
< -5% -5% to -2% -2% to 0% 0% 0% to +2% +2% to +5% > +5%

Top Holdings (by weight)

Symbol Company Name Weight
AMT AMERICAN TOWER CORP 7.5 %
PLD PROLOGIS INC 6.5 %
EQIX EQUINIX INC 5.5 %
WELL WELLTOWER INC 4.7 %
SPG SIMON PROPERTY GROUP INC 3.6 %
O REALTY INCOME CORP 3.5 %
DLR DIGITAL REALTY TRUST INC 3.5 %
PSA PUBLIC STORAGE 3.3 %
CCI CROWN CASTLE INC 3.2 %
CBRE CBRE GROUP INC CLASS A 2.7 %
Top 10 holdings shown, out of 142 total holdings.

Related ETFs: FREL vs Peers

ETF Full Name Expense Ratio Net Assets Holdings Asset Class
FRI First Trust S&P REIT Index Fund 0.50 % $155.3M 139 Real Estate
IYR iShares U.S. Real Estate ETF 0.39 % $3.6B 67 Real Estate
MORT VanEck Mortgage REIT Income ETF 0.43 % $312.3M 25 Real Estate
REET iShares Global REIT ETF 0.14 % $3.8B 334 Real Estate
REM iShares Mortgage Real Estate ETF 0.48 % $651M 34 Real Estate
RWR SPDR Dow Jones REIT ETF 0.25 % $1.9B 105 Real Estate
SCHH Schwab US REIT ETF 0.07 % $7.6B 122 Real Estate
USRT iShares Core U.S. REIT ETF 0.08 % $2.9B 133 Real Estate
VNQ Vanguard Real Estate ETF 0.13 % $65.7B 159 Real Estate
XLRE Real Estate Select Sector SPDR Fund 0.08 % $7.4B 33 Real Estate
Comparison highlights key differences on cost, coverage, and focus within sector ETFs.

Investment Strategy

FREL is designed to track the performance of the MSCI USA IMI Real Estate Index, which includes a broad range of U.S. real estate equities, such as REITs and real estate operating companies. The index is market-cap weighted, meaning larger companies have a greater influence on the fund's performance. FREL is passively managed, aiming to replicate the index's returns by holding a diversified portfolio of securities. The fund primarily invests in common stocks of real estate companies, providing direct exposure to the sector. Rebalancing occurs periodically to align with the index's composition, ensuring the fund maintains its target allocations.

Frequently Asked Questions

What index does FREL track?

FREL tracks the MSCI USA IMI Real Estate Index, which includes a broad range of U.S. real estate equities, such as REITs and real estate operating companies.

How does FREL compare to VNQ?

FREL and VNQ both provide exposure to the U.S. real estate sector, but FREL has a slightly lower expense ratio and includes a broader range of real estate-related companies compared to VNQ's focus on REITs.

Does FREL pay dividends?

Yes, FREL pays dividends, as many of its underlying holdings are REITs, which are required to distribute a significant portion of their income to shareholders.

What are the main risks of investing in FREL?

The main risks include interest rate sensitivity, economic cyclicality, and sector concentration, as the fund is entirely focused on the real estate sector.

Is FREL actively managed?

No, FREL is passively managed and aims to replicate the performance of its benchmark index, the MSCI USA IMI Real Estate Index.

Industry Overview

The Fidelity MSCI Real Estate Index ETF (FREL) provides exposure to the U.S. real estate sector, which includes REITs and other real estate-related companies. Investing in real estate through ETFs like FREL offers a way to gain diversified exposure to the sector without the need to own physical properties. The real estate sector is known for its potential to provide income through dividends and capital appreciation, making it an attractive option for income-focused investors. However, the sector is also sensitive to economic cycles, interest rates, and market conditions, which can impact performance. FREL tracks the MSCI USA IMI Real Estate Index, offering broad market coverage and liquidity for investors.

Alternative Comparison

FREL is often compared to other real estate ETFs like VNQ (Vanguard Real Estate ETF) and SCHH (Schwab U.S. REIT ETF). While all three funds provide exposure to the U.S. real estate sector, FREL stands out for its competitive expense ratio, making it a cost-effective choice. Unlike some peers that may focus narrowly on REITs, FREL includes a broader range of real estate-related companies, offering more diversified exposure. Additionally, FREL's passive management approach aligns with investors seeking low-cost, index-tracking strategies without active management risks.

Issuer Overview

Fidelity Investments, the issuer of FREL, is one of the largest and most well-known asset management firms globally. With a strong reputation for offering low-cost, high-quality investment products, Fidelity provides a range of ETFs and mutual funds across various asset classes. The firm is known for its investor-friendly approach, including competitive expense ratios and robust customer support. Fidelity's expertise in index-tracking and passive investment strategies makes FREL a reliable option for investors seeking real estate exposure.

Conclusion

FREL is a solid choice for investors seeking diversified, low-cost exposure to the U.S. real estate sector. Its passive management strategy, competitive expense ratio, and broad market coverage make it an attractive option for both beginner and experienced investors. However, potential investors should be aware of the risks associated with the real estate sector, including interest rate sensitivity and economic cyclicality. Overall, FREL provides a convenient and efficient way to add real estate exposure to a diversified investment portfolio.

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