Growth stocks that propelled the market in 2025 have raised questions as to whether their current valuations align with their fundamentals. This uncertainty is helping to bring value investing back into the forefront. That said, a two-fund combination worth considering for global value exposure is the Fidelity Value Factor ETF (FVAL ) and the Fidelity International Value Factor ETF (FIVA ).
FVAL tracks the Fidelity U.S. Value Factor Index. It offers a cost-effective means for targeting companies that exhibit the value investment factor. The fund carries a net expense ratio of just 15 basis points, or $15 per every $10,000 invested.
Finding value in the midst of a high growth market can be a trying task. FVAL aims to make that process easier by using a discerning rules-based proprietary index methodology to find value-focused opportunities. The strategy entails ranking stocks within each sector and then giving each a composite score based on four typical value measures: high free-cash-flow yield; low enterprise value to earnings before interest, taxes, depreciation and amortization; low price to tangible book value; and low price to future earnings. Composite scores are adjusted within each sector according to market capitalization. That said, the fund primarily contains mostly large cap, but also mid-cap names for added diversification. The stocks chosen for the index are the remaining companies with the highest composite scores within each sector.
As of December 31, the top three holdings in the fund are Nvidia, Apple, and Microsoft. This makes the fund primarily dominated by tech from a sector allocation perspective, but diversification is apparent with exposure to financials, health care, and consumer discretionary, among others.
Finding Value Internationally
The case for FIVA comes at a time when more investors are gravitating towards international assets. The current global macro environment is conducive to international equities given the weakness in the dollar after the U.S. Federal Reserve cut interest rates three times consecutively to end 2025.
International investing comes with its own unique set of idiosyncratic risks, but the methodology for finding value in FIVA is similar to FVAL. International stocks are grouped by country as well as sector, and then ranked within each group via a composite score using the same four measures of value that FVAL utilizes. Within each country/sector group, composite score adjustments remove size bias and the highest scores are included in the index.
FVAL and FIVA can be used as standalone products for equity allocation in a portfolio. However, both can be combined for comprehensive value exposure for global diversification. FIVA also carries a low expense ratio of 19 basis points, or $19 per every $10,000 invested.
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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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