Fidelity® Value Factor ETF (FVAL)

ETF Fidelity® Value Factor ETF (FVL)

Profile:

FVL is an actively managed exchange-traded fund (ETF) that seeks long-term capital appreciation by investing in a diversified portfolio of U.S. equities with value characteristics. It employs a quantitative model to identify stocks with potential for above-average price appreciation. The fund primarily invests in large- and mid-cap stocks across various sectors.

Objective:

The primary goal of FVL is to provide investors with long-term capital growth through exposure to value stocks. The fund aims to outperform the Russell 1000 Value Index.

Issuer:

Fidelity Management & Research Company is the issuer of FVL.

Reputation and Reliability:

Fidelity Management & Research Company is a renowned asset management firm with a long and successful track record. It has a reputation for offering high-quality investment products and services.

Management:

The portfolio management team of FVL consists of experienced investment professionals with expertise in quantitative analysis and value investing.

Market Share:

FVL holds a small market share within the value ETF space. As of October 26, 2023, it accounts for approximately 0.2% of the total assets invested in value ETFs.

Total Net Assets:

FVL has approximately $4.5 billion in total net assets as of October 26, 2023.

Moat:

FVL's competitive advantages include its:

• Quantitative Investment Approach: The fund's reliance on a quantitative model allows for a disciplined and data-driven approach to stock selection.
• Experienced Management Team: The portfolio management team's expertise in value investing contributes to the fund's performance.
• Low Expense Ratio: Compared to other actively managed value ETFs, FVL has a relatively low expense ratio, which can enhance returns over time.

Financial Performance:

FVL has delivered competitive returns since its inception in 2017. Over the past three years, the fund has generated an annualized return of 12.5%, outperforming the Russell 1000 Value Index, which returned 10.2% during the same period.

Growth Trajectory:

The growth trajectory of FVL is dependent on various factors, including market conditions, investor demand for value stocks, and the fund's performance. The continued success of its investment strategy could lead to further growth in assets under management.

Liquidity:

FVL has an average daily trading volume of approximately 200,000 shares, indicating moderate liquidity. The bid-ask spread is tight, suggesting low trading costs.

Market Dynamics:

FVL's performance is influenced by several market dynamics, including:

• Economic Growth: A strong economy generally benefits value stocks as they tend to perform well during periods of economic expansion.
• Interest Rates: Rising interest rates can negatively impact value stocks, as they are typically more sensitive to changes in borrowing costs.
• Investor Sentiment: Investor sentiment towards value stocks can fluctuate, impacting the demand for FVL and its performance.

Competitors:

Key competitors of FVL include:

• iShares S&P 500 Value ETF (IVE) with a market share of 25.5%
• Vanguard Value ETF (VTV) with a market share of 22.4%
• Schwab U.S. Large-Cap Value ETF (SCHV) with a market share of 12.3%

Expense Ratio:

FVL has an expense ratio of 0.35%, which is considered low compared to other actively managed value ETFs.

Investment Approach and Strategy:

FVL employs a quantitative model to identify undervalued stocks based on factors such as price-to-earnings ratio, price-to-book ratio, and free cash flow yield. The fund invests in a diversified portfolio of approximately 200 stocks across various sectors.

Key Points:

• Actively managed value ETF seeking long-term capital appreciation.
• Invests in U.S. equities with value characteristics.
• Experienced management team and quantitative investment approach.
• Competitive returns and low expense ratio.
• Moderate liquidity and tight bid-ask spread.

Risks:

The main risks associated with FVL include:

• Market Risk: The value of FVL's underlying holdings can fluctuate due to market conditions, potentially leading to losses.
• Volatility: Value stocks can be more volatile than growth stocks, resulting in larger price swings.
• Active Management Risk: The fund's performance is dependent on the success of its investment strategy and the skill of the portfolio management team.

Who Should Consider Investing:

FVL is suitable for investors seeking:

• Long-term capital appreciation through exposure to value stocks.
• An actively managed approach with a quantitative investment strategy.
• A diversified portfolio of U.S. equities with value characteristics.
• A relatively low expense ratio.

Fundamental Rating Based on AI:

Based on an AI-driven analysis of FVL's financials, market position, and future prospects, the fund receives a 7 out of 10 rating. This score reflects the fund's strong track record, experienced management team, and attractive valuation. However, its relatively small market share and limited liquidity present potential drawbacks.

Resources and Disclaimers:

The information provided in this analysis is based on data gathered from the following sources:

• Fidelity Investments website
• Morningstar
• Bloomberg

This analysis is for informational purposes only and should not be considered investment advice. Investors should conduct their own due diligence before making any investment decisions.