Looking for broad exposure to the Large Cap Blend segment of the US equity market? You should consider the Fidelity Quality Factor ETF (FQAL), a passively managed exchange traded fund launched on September 12, 2016.
The fund is sponsored by Fidelity. It has amassed assets over $1.40 billion, making it one of the larger ETFs attempting to match the Large Cap Blend segment of the US equity market.
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.
Typically holding a combination of both growth and value stocks, blend ETFs also demonstrate qualities seen in value and growth investments.
Costs
Cost 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 0.15%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 1.13%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, 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 35.5% of the portfolio. Financials and Telecom round out the top three.
Looking at individual holdings, Nvidia Corp (NVDA) accounts for about 7.6% of total assets, followed by Apple Inc (AAPL) and Alphabet Inc Cl A (GOOGL).
The top 10 holdings account for about 36.1% 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 has gained about 6.26% so far this year and is up roughly 19.6% in the last one year (as of 05/21/2026). In the past 52-week period, it has traded between $66.11 and $80.27.
The ETF has a beta of 0.95 and standard deviation of 13.68% 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 $826.24 billion in assets, Vanguard 500 Index Fund ETF Shares has $956.96 billion. IVV has an expense ratio of 0.03% and VOO charges 0.03%.
Bottom-Line
Passively 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.
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Fidelity Quality Factor ETF (FQAL): ETF Research Reports
This article originally published on Zacks Investment Research (zacks.com).