Prediction: Fidelity's Energy ETF Goes Nuclear in 2026

Core Insights - The Fidelity MSCI Energy Index ETF (FENY) started 2026 with a 2% gain and has $1.3 billion in assets, offering exposure to U.S. energy companies with a 0.084% expense ratio [1] - The Trump administration's strategy to control Venezuelan oil production could significantly impact global oil prices, potentially adding 2 million barrels per day to supply if infrastructure is rehabilitated [2] - FENY's performance may be pressured by lower oil prices affecting major holdings like Exxon Mobil (XOM) and Chevron (CVX), which together represent 38% of the portfolio [3] Fund Performance and Holdings - FENY has achieved a 196% return over five years, reflecting the recovery of the energy sector from pandemic lows, although recent oil prices are around $50 per barrel [1] - The fund is heavily concentrated in traditional oil and gas, with only 0.56% exposure to nuclear energy, indicating that returns will largely depend on the performance of its top 10 holdings [4] - The fund's 7% portfolio turnover suggests minimal trading activity, and the 3.07% dividend yield provides some income cushion [5] Market Dynamics - The Trump administration's oil policy could lead to lower oil prices, which may pressure FENY's upstream producers, but U.S. energy policy support could mitigate these effects [3][7] - Investors seeking more diversified energy exposure may consider the Vanguard Energy ETF (VDE), which has $8.8 billion in assets and a broader composition of 109 positions [6] Monitoring and Strategy - It is recommended to monitor FENY's quarterly holdings reports and MSCI USA IMI Energy Index methodology updates for potential compositional shifts [5] - The overall performance of FENY in 2026 will hinge on the impact of the Trump administration's Venezuela oil policy on global crude prices and the ability of U.S. energy policies to support profitability [7]