Launched on September 12, 2016, the Fidelity Quality Factor ETF (FQAL Quick QuoteFQAL - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Large Cap Blend segment of the US equity market.

The fund is sponsored by Fidelity. It has amassed assets over $1.14 billion, making it one of the larger ETFs attempting to match the Large Cap Blend segment of the US equity market.

Why Large Cap Blend

Large cap companies typically 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.

Blend ETFs usually hold a mix of growth and value stocks as well as stocks that exhibit both value and growth characteristics.

Costs

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 this ETF are 0.15%, making it one of the cheaper products in the space.

It has a 12-month trailing dividend yield of 1.13%.

Sector Exposure and Top Holdings

ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.

This ETF has heaviest allocation to the Information Technology sector -- about 32.6% of the portfolio. Financials and Healthcare round out the top three.

Looking at individual holdings, Nvidia Corp (NVDA) accounts for about 7.28% of total assets, followed by Apple Inc (AAPL) and Microsoft Corp (MSFT).

The top 10 holdings account for about 39.97% of total assets under management.

Performance and Risk

FQAL seeks to match the performance of the Fidelity U.S. Quality Factor Index before fees and expenses. The Fidelity U.S. Quality Factor Index reflects the performance of stocks of large and mid-capitalization U.S. companies with a higher quality profile than the broader market.

The ETF has lost about 1.22% so far this year and is up about 16.28% in the last one year (as of 03/18/2026). In the past 52-week period, it has traded between $57.29 and $77.54.

The ETF has a beta of 0.97 and standard deviation of 13.6% for the trailing three-year period. With about 130 holdings, it effectively diversifies company-specific risk.

Alternatives

Fidelity Quality 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, FQAL is an outstanding option for investors seeking exposure to the Style Box - Large Cap Blend segment of the market. There are other additional ETFs in the space that investors could consider as well.

The iShares Core S&P 500 ETF (IVV) and the Vanguard 500 Index Fund ETF Shares (VOO) track a similar index. While iShares Core S&P 500 ETF has $702.74 billion in assets, Vanguard 500 Index Fund ETF Shares has $852.76 billion. IVV has an expense ratio of 0.03% and VOO charges 0.03%.

Bottom-Line

Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.

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.