The Fidelity Value Factor ETF (FVAL) made its debut on 09/12/2016, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Large Cap Value category of the market.

What Are Smart Beta ETFs?

The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.

Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.

On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.

These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.

While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.

Fund Sponsor & Index

The fund is sponsored by Fidelity. It has amassed assets over $1.33 billion, making it one of the average sized ETFs in the Style Box - Large Cap Value. This particular fund, before fees and expenses, seeks to match the performance of the Fidelity U.S. Value Factor Index.

The Fidelity U.S. Value Factor Index reflects the performance of stocks of large and mid-capitalization U.S. companies that have attractive valuations.

Cost & Other Expenses

For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.

Annual operating expenses for this ETF are 0.15%, making it one of the least expensive products in the space.

It has a 12-month trailing dividend yield of 1.56%.

Sector Exposure and Top Holdings

ETFs offer 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.

FVAL's heaviest allocation is in the Information Technology sector, which is about 33.2% of the portfolio. Its Financials and Healthcare round out the top three.

Looking at individual holdings, Nvidia Corp (NVDA) accounts for about 7.62% of total assets, followed by Apple Inc (AAPL) and Alphabet Inc Cl A (GOOGL).

Its top 10 holdings account for approximately 42.15% of FVAL's total assets under management.

Performance and Risk

The ETF return is roughly 12.17% and it's up approximately 26.54% so far this year and in the past one year (as of 08/03/2026), respectively. FVAL has traded between $64.36 and $80.58 during this last 52-week period.

The fund has a beta of 0.95 and standard deviation of 14.17% for the trailing three-year period. With about 131 holdings, it effectively diversifies company-specific risk .

Alternatives

Fidelity Value Factor ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.

Schwab U.S. Dividend Equity ETF (SCHD) tracks Dow Jones U.S. Dividend 100 Index and the Vanguard Value Index Fund ETF Shares (VTV) tracks CRSP U.S. Large Cap Value Index. Schwab U.S. Dividend Equity ETF has $103.87 billion in assets, Vanguard Value Index Fund ETF Shares has $188.4 billion. SCHD has an expense ratio of 0.06% and VTV changes 0.03%.

Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Value

Bottom Line

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

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Fidelity Value Factor ETF (FVAL): ETF Research Reports

This article originally published on Zacks Investment Research (zacks.com).

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