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

The fund is sponsored by Fidelity. It has amassed assets over $1.43 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 usually have a market capitalization above $10 billion. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.

Typically holding a combination of both growth and value stocks, blend ETFs also demonstrate qualities seen in value and growth investments.

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 1.16%.

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 37.2% of the portfolio. Financials and Healthcare round out the top three.

Looking at individual holdings, Nvidia Corp (NVDA) accounts for about 7.65% of total assets, followed by Apple Inc (AAPL) and Microsoft Corp (MSFT).

The top 10 holdings account for about 39.28% 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 return is roughly 11.81% so far this year and is up roughly 14.33% in the last one year (as of 09/25/2026). In the past 52-week period, it has traded between $70.75 and $85.47.

The ETF has a beta of 0.94 and standard deviation of 13.61% for the trailing three-year period. With about 138 holdings, it effectively diversifies company-specific risk.

Alternatives

Fidelity Quality Factor ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, FQAL is a reasonable option for those seeking exposure to the Style Box - Large Cap Blend area of the market. Investors might also want to consider some other ETF options in the space.

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 $862.32 billion in assets, Vanguard 500 Index Fund ETF Shares has $1,052.42 billion. IVV has an expense ratio of 0.03% and VOO charges 0.03%.

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.