Launched on 9/12/2016, the Fidelity Value Factor ETF (FVAL) is a passively managed exchange-traded fund designed to provide broad exposure to the Large Cap Value segment of the US stock market.

The fund is sponsored by Fidelity. It has amassed over $934.19 million in assets, making it one of the mid-sized ETFs trying to match the Large Cap Value segment of the US stock market.

Large-cap companies typically have a market capitalization of more than $10 billion. Large-cap companies are considered a more stable option and have more predictable cash flows and are less volatile than their mid-cap counterparts.

Value stocks have lower than average price-to-earnings and price-to-book ratios. They also have lower than average sales and profit growth. Looking at their long-term performance, value stocks have outperformed growth stocks in almost all markets. However, in strong bull markets, they are likely to underperform growth stocks.

Expense ratios are an important factor in an ETF’s performance, and over the long term, cheaper funds can significantly outperform their more expensive counterparts, other things being equal.

The annual operating expense for this ETF is 0.15%, making it one of the least expensive products on the market.

It has a 12-month rolling dividend yield of 1.62%.

Although ETFs provide diversified exposure that minimizes risk on individual stocks, it’s still important to research a fund’s investments before investing. Fortunately, most ETFs are highly transparent products that disclose their holdings on a daily basis.

This ETF has the largest allocation to the information technology sector: approximately 29.80% of the portfolio. Financial services and healthcare complete the top three.

Looking at individual holdings, Apple Inc (AAPL) accounts for about 6.97% of total assets, followed by Microsoft Corp (MSFT) and Nvidia Corp (NVDA).

The top 10 holdings account for approximately 37.06% of the total assets under management.

FVAL aims to match the performance of the Fidelity US Value Factor Index, excluding fees and expenses. The Fidelity US Value Factor Index reflects the performance of stocks of large and mid-cap US companies that have attractive valuations.

The ETF has gained about 16.96% so far this year and is up about 28.66% over the past year (as of 6/11/2024). The last 52-week period has traded between $47.89 and $61.98.

The ETF has a beta of 1.02 and a standard deviation of 17.06% for the trailing three-year period. With approximately 131 investments, the company effectively diversifies company-specific risk.

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