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

Why Large Cap Blend

Large cap companies 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.

Blend ETFs usually hold a mix of growth and value stocks as well as stocks that exhibit both value and growth characteristics.

Costs

Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.

Annual operating expenses for this ETF are 0.15%, 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 Holdings

Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, 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 34.2% of the portfolio. Financials and Industrials round out the top three.

Looking at individual holdings, Nvidia Corp (NVDA) accounts for about 7.33% of total assets, followed by Cash Cf (.CFTAX) and Apple Inc (AAPL).

The top 10 holdings account for about 39.92% of total assets under management.

Performance and Risk

FQAL 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 return is roughly 8.92% so far this year and it's up approximately 17.4% in the last one year (as of 07/23/2026). In the past 52-week period, it has traded between $70.11 and $82.58.

The ETF has a beta of 0.94 and standard deviation of 13.65% for the trailing three-year period. With about 129 holdings, it effectively diversifies company-specific risk.

Alternatives

Fidelity 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 an excellent 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 500 Index Fund ETF Shares (VOO) track a similar index. While iShares Core S&P 500 ETF has $881.97 billion in assets, Vanguard 500 Index Fund ETF Shares has $979.69 billion. IVV has an expense ratio of 0.03% and VOO charges 0.03%.

Bottom-Line

An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also 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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This article originally published on Zacks Investment Research (zacks.com).

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