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Should Fidelity Value Factor ETF (FVAL) Be on Your Investing Radar?
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If you're interested in broad exposure to the Large Cap Value segment of the US equity market, look no further than the Fidelity Value Factor ETF (FVAL - Free Report) , a passively managed exchange traded fund launched on 09/12/2016.
The fund is sponsored by Fidelity. It has amassed assets over $963.79 million, making it one of the average sized ETFs attempting to match the Large Cap Value segment of the US equity market.
Why Large Cap Value
Companies that find themselves in the large cap category typically have a market capitalization above $10 billion. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.
While value stocks have lower than average price-to-earnings and price-to-book ratios, they also have lower than average sales and earnings growth rates. Looking at their long-term performance, value stocks have outperformed growth stocks in almost all markets. They are however likely to underperform growth stocks in strong bull markets.
Costs
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.16%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 1.58%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Information Technology sector--about 30.40% of the portfolio. Financials and Consumer Discretionary round out the top three.
Looking at individual holdings, Nvidia Corp (NVDA - Free Report) accounts for about 7.04% of total assets, followed by Apple Inc (AAPL - Free Report) and Microsoft Corp (MSFT - Free Report) .
The top 10 holdings account for about 37.73% of total assets under management.
Performance and Risk
FVAL seeks to match the performance of the Fidelity U.S. Value Factor Index before fees and expenses. The Fidelity U.S. Value Factor Index reflects the performance of stocks of large and mid-capitalization U.S. companies that have attractive valuations.
The ETF has added about 0.94% so far this year and it's up approximately 20.18% in the last one year (as of 01/06/2025). In the past 52-week period, it has traded between $52.14 and $64.39.
The ETF has a beta of 1.02 and standard deviation of 16.96% for the trailing three-year period. With about 131 holdings, it effectively diversifies company-specific risk.
Alternatives
Fidelity Value Factor ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, FVAL is a good option for those seeking exposure to the Style Box - Large Cap Value area of the market. Investors might also want to consider some other ETF options in the space.
The Schwab U.S. Dividend Equity ETF (SCHD - Free Report) and the Vanguard Value ETF (VTV - Free Report) track a similar index. While Schwab U.S. Dividend Equity ETF has $65.86 billion in assets, Vanguard Value ETF has $127.22 billion. SCHD has an expense ratio of 0.06% and VTV charges 0.04%.
Bottom-Line
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Should Fidelity Value Factor ETF (FVAL) Be on Your Investing Radar?
If you're interested in broad exposure to the Large Cap Value segment of the US equity market, look no further than the Fidelity Value Factor ETF (FVAL - Free Report) , a passively managed exchange traded fund launched on 09/12/2016.
The fund is sponsored by Fidelity. It has amassed assets over $963.79 million, making it one of the average sized ETFs attempting to match the Large Cap Value segment of the US equity market.
Why Large Cap Value
Companies that find themselves in the large cap category typically have a market capitalization above $10 billion. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.
While value stocks have lower than average price-to-earnings and price-to-book ratios, they also have lower than average sales and earnings growth rates. Looking at their long-term performance, value stocks have outperformed growth stocks in almost all markets. They are however likely to underperform growth stocks in strong bull markets.
Costs
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.16%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 1.58%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Information Technology sector--about 30.40% of the portfolio. Financials and Consumer Discretionary round out the top three.
Looking at individual holdings, Nvidia Corp (NVDA - Free Report) accounts for about 7.04% of total assets, followed by Apple Inc (AAPL - Free Report) and Microsoft Corp (MSFT - Free Report) .
The top 10 holdings account for about 37.73% of total assets under management.
Performance and Risk
FVAL seeks to match the performance of the Fidelity U.S. Value Factor Index before fees and expenses. The Fidelity U.S. Value Factor Index reflects the performance of stocks of large and mid-capitalization U.S. companies that have attractive valuations.
The ETF has added about 0.94% so far this year and it's up approximately 20.18% in the last one year (as of 01/06/2025). In the past 52-week period, it has traded between $52.14 and $64.39.
The ETF has a beta of 1.02 and standard deviation of 16.96% for the trailing three-year period. With about 131 holdings, it effectively diversifies company-specific risk.
Alternatives
Fidelity Value Factor ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, FVAL is a good option for those seeking exposure to the Style Box - Large Cap Value area of the market. Investors might also want to consider some other ETF options in the space.
The Schwab U.S. Dividend Equity ETF (SCHD - Free Report) and the Vanguard Value ETF (VTV - Free Report) track a similar index. While Schwab U.S. Dividend Equity ETF has $65.86 billion in assets, Vanguard Value ETF has $127.22 billion. SCHD has an expense ratio of 0.06% and VTV charges 0.04%.
Bottom-Line
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.