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Low Volatility ETF (FDLO) Hits New 52-Week High

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For investors seeking momentum, Fidelity Low Volatility Factor ETF (FDLO - Free Report) is probably on the radar now. The fund just hit a 52-week high and is up nearly 18.4% from its 52-week low price of $27.81/share.

But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed.

FDLO in Focus      

The fund tracks the Fidelity U.S. Low Volatility Factor Index, which reflects the performance of stocks of large and mid-capitalization U.S. companies with lower volatility than the broader market. Information Technology (25.76%), Financials (14.38%), Health Care (13.69%) and Consumer Discretionary (12.84%) are the top four sectors of the fund. The product charges 29 bps in fees (see all Large Cap ETFs here).

Why the Move?  

Given escalating trade tensions between the United States and China, investors probably apprehended more volatility in the market. After targeting each other’s $34-billion worth of imports, China announced on Aug 8 that it would enact a 25% tariff on U.S. imports worth $16 billion, including crude oil, diesel coal and cars in retaliation to the tax on an equal amount of imports to be enacted by U.S. authorities from Aug 23. Consequently, this low-volatility U.S. ETF has gained momentum.

More Gains Ahead?

It seems that the fund will perform decently in the near term given a positive weighted alpha of 17.70.

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