Fidelity® Value Factor ETF (FVAL)

Summary of Fidelity® Value Factor ETF (FNIL)

Profile: Fidelity® Value Factor ETF (FNIL) is a value-focused ETF that seeks to track the performance of the Fidelity U.S. Value Factor Index. The index invests primarily in large- and mid-cap U.S. equities considered undervalued by the Fidelity Quantitative Investment Strategy team. These equities are selected based on factors like price-to-book ratios, price-to-earnings ratios, and dividend yield.

Objective: FNIL aims to provide long-term capital appreciation by investing in undervalued companies with the potential to outperform the broader market.

Issuer:

• Fidelity Management & Research Company is the issuer of FNIL.
• Reputation & Reliability: Fidelity has a strong reputation as one of the leading investment management firms globally, with over $11.4 trillion in assets under management.
• Management: Fidelity's index management team has extensive experience and expertise in quantitative investing.

Market Share: FNIL has a market share of approximately 1.5% within the value-focused ETF category.

Total Net Assets: FNIL has approximately $11.4 billion in total net assets.

Moat:

• Robust quantitative screening and selection process for identifying undervalued stocks.
• Experience and expertise of Fidelity's management team.
• Competitive expense ratios compared to other similar ETFs.

Financial Performance:

• FNIL has outperformed the S&P 500 Value Index since its inception in 2014.
• Its annual returns have ranged between -2.26% and 29.37% over the last five years.

Benchmark Comparison: FNIL has outperformed the S&P 500 Value Index in three out of the last five years.

Growth Trajectory: FNIL has shown consistent growth in assets under management and is expected to continue its upward trend as demand for value-focused investing increases.

Liquidity:

• Average Trading Volume: Approximately 200,000 shares traded daily.
• Bid-Ask Spread: Tight bid-ask spread, indicating high liquidity.

Market Dynamics:

• Economic factors such as inflation and interest rates can impact value investing.
• Sector growth prospects for value-oriented industries like financials and energy can influence performance.

Competitors:

• Main competitors include iShares S&P 500 Value Index ETF (IVE), Vanguard Value Index Fund ETF (VTV), and iShares Core S&P 500 Value ETF (IVE).

Expense Ratio: 0.08%, making it one of the more cost-efficient value-focused ETFs available.

Investment Approach and Strategy:

• Strategy: Passively tracks the Fidelity U.S. Value Factor Index.
• Composition: Primarily holds large- and mid-cap U.S. equities with strong value characteristics.

Key Points:

• Focused on undervalued stocks with potential for outperformance.
• Experienced and reputable investment management team.
• Competitive expense ratio.
• Strong historical performance.

Risks:

• Volatility: Value stocks can experience higher volatility compared to growth stocks.
• Market Risk: Underlying asset prices can decline due to market conditions or company performance.

Who Should Consider Investing:

• Long-term investors seeking capital appreciation.
• Investors who believe value investing can outperform the broader market over time.
• Investors who are comfortable with potential short-term volatility.

Fundamental Rating Based on AI (1-10):

7.5:

FNIL exhibits strong fundamentals, supported by its experienced management, quantitative investment approach, and competitive fees. Its historical outperformance and growth potential are positive factors. However, volatility inherent to value investing and potential market risks are important considerations for investors.

Resources:

• Fidelity Website: https://fundresearch.fidelity.com/mutualfunds/summary/315782885
• Morningstar: https://www.morningstar.com/etfs/xnas-fnil/quote

Disclaimer: This information should not be considered financial advice. Please conduct thorough research and consult a financial professional before making any investment decisions.