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Is Fidelity Value Factor ETF (FVAL) a Strong ETF Right Now?
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Making its debut on 09/12/2016, smart beta exchange traded fund Fidelity Value Factor ETF (FVAL - Free Report) provides investors broad exposure to the Style Box - Large Cap Value category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
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.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
The fund is sponsored by Fidelity. It has amassed assets over $733.32 million, making it one of the average sized ETFs in the Style Box - Large Cap Value. Before fees and expenses, FVAL 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
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Operating expenses on an annual basis are 0.15% for FVAL, 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
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
Representing 28.20% of the portfolio, the fund has heaviest allocation to the Information Technology sector; Financials and Healthcare round out the top three.
When you look at individual holdings, Apple Inc (AAPL - Free Report) accounts for about 7.61% of the fund's total assets, followed by Microsoft Corp (MSFT - Free Report) and Alphabet Inc Cl A (GOOGL - Free Report) .
Its top 10 holdings account for approximately 33.79% of FVAL's total assets under management.
Performance and Risk
So far this year, FVAL has gained about 3.64%, and was up about 22.96% in the last one year (as of 02/28/2024). During this past 52-week period, the fund has traded between $43.53 and $55.
The fund has a beta of 1.04 and standard deviation of 17.23% for the trailing three-year period. With about 132 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 $53.66 billion in assets, Vanguard Value ETF has $110.09 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?
Making its debut on 09/12/2016, smart beta exchange traded fund Fidelity Value Factor ETF (FVAL - Free Report) provides investors broad exposure to the Style Box - Large Cap Value category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
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.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
The fund is sponsored by Fidelity. It has amassed assets over $733.32 million, making it one of the average sized ETFs in the Style Box - Large Cap Value. Before fees and expenses, FVAL 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
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Operating expenses on an annual basis are 0.15% for FVAL, 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
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
Representing 28.20% of the portfolio, the fund has heaviest allocation to the Information Technology sector; Financials and Healthcare round out the top three.
When you look at individual holdings, Apple Inc (AAPL - Free Report) accounts for about 7.61% of the fund's total assets, followed by Microsoft Corp (MSFT - Free Report) and Alphabet Inc Cl A (GOOGL - Free Report) .
Its top 10 holdings account for approximately 33.79% of FVAL's total assets under management.
Performance and Risk
So far this year, FVAL has gained about 3.64%, and was up about 22.96% in the last one year (as of 02/28/2024). During this past 52-week period, the fund has traded between $43.53 and $55.
The fund has a beta of 1.04 and standard deviation of 17.23% for the trailing three-year period. With about 132 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 $53.66 billion in assets, Vanguard Value ETF has $110.09 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.