Advisors may be able to enhance client portfolios with an allocation to value stocks.
An investor may consider the Fidelity Value Factor ETF (FVAL ) for exposure to a diversified basket of large- and midcap U.S. companies exhibiting value characteristics, potentially benefiting from the historical tendency of value stocks to outperform growth stocks over extended investment horizons, offering the potential for long-term capital appreciation.
The fund uses a factor-based investing strategy, specifically targeting companies that appear undervalued based on various financial metrics. This approach aims to potentially outperform traditional market-cap-weighted indexes over the long term by focusing on stocks with attractive valuations.
Investors who believe in the cyclicality of market leadership and the eventual resurgence of undervalued companies may find FVAL a compelling holding in a well-diversified investment portfolio.
The fund employs a passive management strategy, which aims to replicate the performance of the Fidelity U.S. Value Factor Index℠. This approach typically results in lower operating expenses compared to actively managed funds. Charging just 16 basis points, FVAL offers a passive, potentially lower-cost approach to targeting the value investment factor.
Under the Hood of Fidelity's Value ETF & What It Brings to Portfolios
The value ETF holds 132 securities, with the top 10 holdings comprising 36.59% of the fund as of April 30, 2025. The top names are currently Apple, Microsoft, Nvidia, Amazon, Alphabet, Berkshire Hathaway, Meta Platforms, Visa, Tesla, and Johnson & Johnson. The value ETF’s diversification across numerous companies may mitigate some of the risks associated with investing in individual value stocks.
FVAL’s largest sector allocation is in information technology, at 29.19%, as of April 30, 2025. Financials and healthcare follow, with allocations of 14.56% and 10.87%, respectively. The ETF has the smallest exposure to materials (2.47%), utilities (2.53%), and energy (3.19%).
The fund has $891 million in assets under management as of April 30, 2025, according FVAL’s website.
For more news, information, and analysis, visit the ETF Investing Channel.
Fidelity Investments® is an independent company unaffiliated with VettaFi LLC (“VettaFi”). These articles do not form any kind of legal partnership, agency affiliation, or similar relationship between VettaFi and Fidelity Investments, nor is such a relationship created or implied by the articles herein. VettaFi LLC is the author and owner of these articles.
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