Should Fidelity Quality Factor ETF (FQAL) Be on Your Investing Radar?

Designed to provide broad exposure to the Large Cap Blend segment of the US equity market, the Fidelity Quality Factor ETF (FQAL) is a passively managed exchange traded fund launched on September 12, 2016.The fund is sponsored by Fidelity. It has amassed assets over $1.10 billion, making it one of the larger ETFs attempting to match the Large Cap Blend segment of the US equity market.Why Large Cap BlendLarge cap companies typically have a market capitalization above $10 billion. Overall, they are usually a stable option, with less risk and more sure-fire cash flows than mid and small cap companies.Blend ETFs usually hold a mix of growth and value stocks as well as stocks that exhibit both value and growth characteristics. CostsCost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are 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 1.16%.Sector Exposure and Top HoldingsETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.This ETF has heaviest allocation to the Information Technology sector -- about 32.2% of the portfolio. Financials and Consumer Discretionary round out the top three.Looking at individual holdings, Nvidia Corp (NVDA) accounts for about 8.23% of total assets, followed by Microsoft Corp (MSFT) and Apple Inc (AAPL).The top 10 holdings account for about 38.08% of total assets under management.Performance and RiskFQAL seeks to match the performance of the Fidelity U.S. Quality Factor Index before fees and expenses. The Fidelity U.S. Quality Factor Index reflects the performance of stocks of large and mid-capitalization U.S. companies with a higher quality profile than the broader market.The ETF has added about 12.84% so far this year and it's up approximately 19.45% in the last one year (as of 09/11/2025). In the past 52-week period, it has traded between $57.29 and $73.42.The ETF has a beta of 0.98 and standard deviation of 15.74% for the trailing three-year period. With about 131 holdings, it effectively diversifies company-specific risk.AlternativesFidelity Quality Factor ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, FQAL is a great option for investors seeking exposure to the Style Box - Large Cap Blend segment of the market. There are other additional ETFs in the space that investors could consider as well. The iShares Core S&P 500 ETF (IVV) and the Vanguard S&P 500 ETF (VOO) track a similar index. While iShares Core S&P 500 ETF has $667.88 billion in assets, Vanguard S&P 500 ETF has $742.33 billion. IVV has an expense ratio of 0.03% and VOO charges 0.03%.Bottom-LinePassively 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.Boost Your Portfolio with Our Top ETF InsightsZacks' exclusive Fund Newsletter delivers actionable information, top news and analysis, as well as top-performing ETFs, straight to your inbox every week.Don’t miss out on this valuable resource. It’s free!Get it now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Fidelity Quality Factor ETF (FQAL): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks