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Should Fidelity Value Factor ETF (FVAL) Be on Your Investing Radar?
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The Fidelity Value Factor ETF (FVAL - Free Report) was launched on 09/12/2016, and is a passively managed exchange traded fund designed to offer broad exposure to the Large Cap Value segment of the US equity market.
The fund is sponsored by Fidelity. It has amassed assets over $808.50 million, making it one of the average sized ETFs attempting to match the Large Cap Value segment of the US equity market.
Why Large Cap Value
Large cap companies usually have a market capitalization above $10 billion. Overall, they are usually a stable option, with less risk and more sure-fire cash flows than mid and small cap companies.
Value stocks are known for their lower than average price-to-earnings and price-to-book ratios, but investors should also note their lower than average sales and earnings growth rates. Looking at their long-term performance, value stocks have outperformed growth stocks in almost all markets. They are however likely to underperform growth stocks in strong bull markets.
Costs
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for this ETF are 0.15%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.63%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Information Technology sector--about 28.10% of the portfolio. Financials and Healthcare round out the top three.
Looking at individual holdings, Apple Inc (AAPL - Free Report) accounts for about 7.61% of total assets, followed by Microsoft Corp (MSFT - Free Report) and Alphabet Inc Cl A (GOOGL - Free Report) .
The top 10 holdings account for about 33.79% of total assets under management.
Performance and Risk
FVAL seeks to match the performance of the Fidelity U.S. Value Factor Index before fees and expenses. The Fidelity U.S. Value Factor Index reflects the performance of stocks of large and mid-capitalization U.S. companies that have attractive valuations.
The ETF has gained about 3.78% so far this year and was up about 22.04% in the last one year (as of 02/26/2024). In the past 52-week period, it has traded between $43.53 and $55.
The ETF has a beta of 1.04 and standard deviation of 17.28% for the trailing three-year period. With about 132 holdings, it effectively diversifies company-specific risk.
Alternatives
Fidelity Value Factor ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, FVAL is a great option for investors seeking exposure to the Style Box - Large Cap Value segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares Russell 1000 Value ETF (IWD - Free Report) and the Vanguard Value ETF (VTV - Free Report) track a similar index. While iShares Russell 1000 Value ETF has $53.76 billion in assets, Vanguard Value ETF has $110.38 billion. IWD has an expense ratio of 0.19% and VTV charges 0.04%.
Bottom-Line
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
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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Should Fidelity Value Factor ETF (FVAL) Be on Your Investing Radar?
The Fidelity Value Factor ETF (FVAL - Free Report) was launched on 09/12/2016, and is a passively managed exchange traded fund designed to offer broad exposure to the Large Cap Value segment of the US equity market.
The fund is sponsored by Fidelity. It has amassed assets over $808.50 million, making it one of the average sized ETFs attempting to match the Large Cap Value segment of the US equity market.
Why Large Cap Value
Large cap companies usually have a market capitalization above $10 billion. Overall, they are usually a stable option, with less risk and more sure-fire cash flows than mid and small cap companies.
Value stocks are known for their lower than average price-to-earnings and price-to-book ratios, but investors should also note their lower than average sales and earnings growth rates. Looking at their long-term performance, value stocks have outperformed growth stocks in almost all markets. They are however likely to underperform growth stocks in strong bull markets.
Costs
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for this ETF are 0.15%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.63%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Information Technology sector--about 28.10% of the portfolio. Financials and Healthcare round out the top three.
Looking at individual holdings, Apple Inc (AAPL - Free Report) accounts for about 7.61% of total assets, followed by Microsoft Corp (MSFT - Free Report) and Alphabet Inc Cl A (GOOGL - Free Report) .
The top 10 holdings account for about 33.79% of total assets under management.
Performance and Risk
FVAL seeks to match the performance of the Fidelity U.S. Value Factor Index before fees and expenses. The Fidelity U.S. Value Factor Index reflects the performance of stocks of large and mid-capitalization U.S. companies that have attractive valuations.
The ETF has gained about 3.78% so far this year and was up about 22.04% in the last one year (as of 02/26/2024). In the past 52-week period, it has traded between $43.53 and $55.
The ETF has a beta of 1.04 and standard deviation of 17.28% for the trailing three-year period. With about 132 holdings, it effectively diversifies company-specific risk.
Alternatives
Fidelity Value Factor ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, FVAL is a great option for investors seeking exposure to the Style Box - Large Cap Value segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares Russell 1000 Value ETF (IWD - Free Report) and the Vanguard Value ETF (VTV - Free Report) track a similar index. While iShares Russell 1000 Value ETF has $53.76 billion in assets, Vanguard Value ETF has $110.38 billion. IWD has an expense ratio of 0.19% and VTV charges 0.04%.
Bottom-Line
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
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.