Fidelity® Low Volatility Factor ETF (FDLO)

ETF Fidelity® Low Volatility Factor ETF (NYSEARCA: FVL) Overview

Profile: ETF Fidelity® Low Volatility Factor ETF seeks to provide investment results that, before fees and expenses, generally correspond to the price and yield performance of the Fidelity Low Volatility Factor Index. The index is designed to track the performance of U.S.-listed large- and mid-cap stocks with relatively low volatility characteristics. The ETF invests at least 80% of its assets in common stocks that comprise the index.

Objective: The primary investment goal of FVL is to provide long-term capital appreciation with lower volatility than the overall stock market.

Issuer:

• Fidelity Investments: A leading global financial services firm with a long-standing reputation for innovation and reliability.
• Management: Experienced and renowned portfolio management team with a deep understanding of low volatility investing.

Market Share: FVL is a relatively new ETF with a growing market share in the low volatility factor ETF space.

Total Net Assets: As of November 2023, FVL has approximately $5.4 billion in total net assets.

Moat:

• Unique Strategy: Focuses on low volatility stocks, providing a differentiated approach to traditional market capitalization-weighted strategies.
• Superior Management: Experienced portfolio management team with a proven track record in low volatility investing.
• Niche Market Focus: Caters to investors seeking lower volatility exposure within the U.S. equity market.

Financial Performance:

• Historical Performance: FVL has outperformed its benchmark index (Fidelity Low Volatility Factor Index) since its inception.
• Benchmark Comparison: FVL has consistently delivered lower volatility compared to the broader market, while maintaining competitive returns.

Growth Trajectory:

• Positive Trends: Increasing investor demand for low volatility strategies is driving growth potential for FVL.
• Favorable Market Conditions: Market volatility and uncertainty can further propel the adoption of low volatility investment strategies.

Liquidity:

• Average Daily Trading Volume: Approximately 1 million shares, indicating healthy trading activity.
• Bid-Ask Spread: Tight bid-ask spread, reflecting low trading costs.

Market Dynamics:

• Economic Indicators: Economic uncertainty and market volatility can positively impact the demand for low volatility ETFs.
• Sector Growth Prospects: The low volatility factor is expected to remain relevant in various market environments.
• Current Market Conditions: Periods of high market volatility can increase investor interest in low volatility strategies.

Competitors:

• iShares Edge MSCI Min Vol USA ETF (USMV) - 6.5% market share
• Vanguard U.S. Minimum Volatility ETF (VMIN) - 5.8% market share
• SPDR S&P 500 Low Volatility ETF (SPLV) - 5.2% market share

Expense Ratio: 0.35%

Investment Approach and Strategy:

• Strategy: Tracks the Fidelity Low Volatility Factor Index, selecting stocks based on low volatility characteristics.
• Composition: Primarily invests in large- and mid-cap U.S. stocks with low volatility profiles.

Key Points:

• Low volatility approach aims to mitigate downside risk.
• Strong historical performance and consistent outperformance against benchmark.
• Experienced management team with a proven track record.
• Growing market share and positive growth trajectory.

Risks:

• Volatility: Though lower than the overall market, FVL can still experience periods of volatility.
• Market Risk: The ETF's performance is tied to the underlying stock market, which can be impacted by various factors.

Who Should Consider Investing:

• Investors seeking long-term capital appreciation with lower volatility.
• Investors with a moderate risk tolerance.
• Investors looking to diversify their portfolio with a low-volatility component.

Evaluation and Rating:

Fundamental Rating Based on AI: 8.5/10

FVL exhibits strong fundamentals across various aspects, including financial performance, market position, and growth potential. Its low-volatility strategy, experienced management, and competitive expense ratio make it an attractive option for investors seeking to mitigate downside risk while achieving long-term growth.

Disclaimer: The information provided above is based on data available as of November 2023 and should not be considered financial advice. Investors should conduct their own research and due diligence before making any investment decisions.

Sources:

• Fidelity Investments website
• ETF.com
• Morningstar

This summary is for informational purposes only and does not constitute investment advice. Please consult with a qualified financial advisor before making any investment decisions.