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Is Fidelity Value Factor ETF (FVAL) a Strong ETF Right Now?
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A smart beta exchange traded fund, the Fidelity Value Factor ETF (FVAL - Free Report) debuted on 09/12/2016, and offers broad exposure to the Style Box - Large Cap Value category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
Because the fund has amassed over $632.75 million, this makes it one of the average sized ETFs in the Style Box - Large Cap Value. FVAL is managed by Fidelity. Before fees and expenses, this particular fund seeks to match the performance of the Fidelity U.S. Value Factor Index.
The Fidelity U.S. Value Factor Index reflects the performance of stocks of large and mid-capitalization U.S. companies that have attractive valuations.
Cost & Other Expenses
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for FVAL are 0.15%, which makes it one of the least expensive products in the space.
The fund has a 12-month trailing dividend yield of 1.69%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
For FVAL, it has heaviest allocation in the Information Technology sector --about 26.50% of the portfolio --while Financials and Consumer Discretionary round out the top three.
Taking into account individual holdings, Apple Inc (AAPL - Free Report) accounts for about 7.87% of the fund's total assets, followed by Microsoft Corp (MSFT - Free Report) and Alphabet Inc Cl A (GOOGL - Free Report) .
FVAL's top 10 holdings account for about 33.91% of its total assets under management.
Performance and Risk
The ETF has added roughly 22.80% so far this year and was up about 23.08% in the last one year (as of 12/25/2023). In the past 52-week period, it has traded between $43.24 and $53.11.
The ETF has a beta of 1.05 and standard deviation of 17.40% for the trailing three-year period. With about 130 holdings, it effectively diversifies company-specific risk.
Alternatives
Fidelity Value Factor ETF is an excellent option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. There are other ETFs in the space which investors could consider as well.
IShares Russell 1000 Value ETF (IWD - Free Report) tracks Russell 1000 Value Index and the Vanguard Value ETF (VTV - Free Report) tracks CRSP U.S. Large Cap Value Index. IShares Russell 1000 Value ETF has $54.83 billion in assets, Vanguard Value ETF has $104.70 billion. IWD has an expense ratio of 0.19% and VTV charges 0.04%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Value.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Is Fidelity Value Factor ETF (FVAL) a Strong ETF Right Now?
A smart beta exchange traded fund, the Fidelity Value Factor ETF (FVAL - Free Report) debuted on 09/12/2016, and offers broad exposure to the Style Box - Large Cap Value category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
Because the fund has amassed over $632.75 million, this makes it one of the average sized ETFs in the Style Box - Large Cap Value. FVAL is managed by Fidelity. Before fees and expenses, this particular fund seeks to match the performance of the Fidelity U.S. Value Factor Index.
The Fidelity U.S. Value Factor Index reflects the performance of stocks of large and mid-capitalization U.S. companies that have attractive valuations.
Cost & Other Expenses
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for FVAL are 0.15%, which makes it one of the least expensive products in the space.
The fund has a 12-month trailing dividend yield of 1.69%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
For FVAL, it has heaviest allocation in the Information Technology sector --about 26.50% of the portfolio --while Financials and Consumer Discretionary round out the top three.
Taking into account individual holdings, Apple Inc (AAPL - Free Report) accounts for about 7.87% of the fund's total assets, followed by Microsoft Corp (MSFT - Free Report) and Alphabet Inc Cl A (GOOGL - Free Report) .
FVAL's top 10 holdings account for about 33.91% of its total assets under management.
Performance and Risk
The ETF has added roughly 22.80% so far this year and was up about 23.08% in the last one year (as of 12/25/2023). In the past 52-week period, it has traded between $43.24 and $53.11.
The ETF has a beta of 1.05 and standard deviation of 17.40% for the trailing three-year period. With about 130 holdings, it effectively diversifies company-specific risk.
Alternatives
Fidelity Value Factor ETF is an excellent option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. There are other ETFs in the space which investors could consider as well.
IShares Russell 1000 Value ETF (IWD - Free Report) tracks Russell 1000 Value Index and the Vanguard Value ETF (VTV - Free Report) tracks CRSP U.S. Large Cap Value Index. IShares Russell 1000 Value ETF has $54.83 billion in assets, Vanguard Value ETF has $104.70 billion. IWD has an expense ratio of 0.19% and VTV charges 0.04%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Value.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.