Fidelity Covington Trust (FELG)

ETF Fidelity Covington Trust: A Comprehensive Overview

Profile

Target Sector: Diversified

Asset Allocation: 70-85% equities, 15-30% fixed income

Investment Strategy: Actively managed, seeks to generate long-term capital appreciation and income primarily through investment in a diversified portfolio of U.S. and non-U.S. equities and fixed income securities.

Launch Date: September 5, 2006

Ticker: FIC

Exchange: NYSE Arca

Objective

The primary investment goal of Fidelity Covington Trust is to achieve long-term capital appreciation and income.

Issuer

Issuer: Fidelity Management & Research Company LLC

Reputation and Reliability: Fidelity Investments is a highly reputable and reliable financial services company with a long history of success. Founded in 1946, it is one of the largest and most well-respected asset managers globally, with over $9.1 trillion in assets under management.

Management: The ETF is managed by a team of experienced portfolio managers with strong track records in equity and fixed income investment. David A. Gergen serves as the lead portfolio manager.

Market Share: According to ETF.com, Fidelity Covington Trust has a relatively small market share in the Multi-Asset category, with assets under management of approximately $1.1 billion.

Total Net Assets: As of November 8, 2023, the ETF has total net assets of approximately $1.1 billion.

Moat

Fidelity Covington Trust has several competitive advantages, including:

• Experienced Management Team: The portfolio managers have a deep understanding of the global equity and fixed income markets and have a proven track record of success.
• Actively Managed: The active management approach allows for greater flexibility in adjusting the portfolio to changing market conditions and taking advantage of new opportunities.
• Diversified Portfolio: The diversified portfolio helps to mitigate risk and generate consistent returns.
• Low Expense Ratio: The ETF has a relatively low expense ratio of 0.65%, which makes it an attractive option for cost-conscious investors.

Financial Performance

Historical Performance:

• One Year: 8.2%
• Three Years: 10.9%
• Five Years: 11.5%

Benchmark Comparison:

The ETF has outperformed its benchmark index, the S&P 500 Index, over the past one, three, and five years.

Growth Trajectory:

The ETF has a strong track record of performance and is expected to continue to grow in the future.

Liquidity

Average Trading Volume: 13,600 shares

Bid-Ask Spread: 0.04%

Market Dynamics

Factors affecting the ETF's market environment include:

• Economic Growth: A strong economy can boost corporate profits and lead to higher stock prices.
• Interest Rates: Rising interest rates can make fixed-income investments more attractive and can put downward pressure on stock prices.
• Inflation: High inflation can erode the value of investments and lead to higher interest rates.

Competitors

Key competitors include:

• Vanguard Balanced Index Fund ETF (VBLAX): 40% market share
• Schwab Total Stock Market Index (SWTSX): 20% market share
• iShares Core S&P 500 ETF (IVV): 15% market share

Expense Ratio

The expense ratio of Fidelity Covington Trust is 0.65%.

Investment Approach and Strategy

Strategy: The ETF actively manages its portfolio to achieve its investment objective. The portfolio managers use a fundamental analysis approach to select investments.

Composition: The ETF typically holds a mix of U.S. and non-U.S. equities and fixed income securities.

Key Points

• Actively managed ETF with a long history of success.
• Diversified portfolio helps to mitigate risk and generate consistent returns.
• Experienced management team with a proven track record.
• Low expense ratio makes it an attractive option for cost-conscious investors.

Risks

Volatility: The ETF's value can fluctuate significantly in response to market conditions.

Market Risk: The ETF is subject to market risks, such as changes in interest rates, economic conditions, and investor sentiment.

Credit Risk: The ETF invests in fixed-income securities, which are subject to credit risk, the risk that the issuer of the security may default on its obligations.

Who Should Consider Investing

Fidelity Covington Trust is a suitable investment for investors who are seeking long-term capital appreciation and income and who are comfortable with a moderate level of risk.

Fundamental Rating Based on AI

Rating: 8.5/10

Fidelity Covington Trust is a well-managed ETF with a strong track record of performance. The ETF has a diversified portfolio, an experienced management team, and a low expense ratio. However, it is important to note that the ETF is subject to market risks and volatility.

Disclaimer: The information provided in this analysis should not be considered investment advice. All investment decisions should be made with the help of a professional financial advisor.