Fidelity Quality Factor ETF Shows Mixed Performance in 2025

FQAL offers a stable option for investors seeking large cap exposure. Despite a 1.59% loss this year, its 12.5% increase over the last year suggests resilience. Attention to its low expense ratio and top holdings, including AAPL, MSFT, and NVDA, remains key.

Date: 08-05-2025

AI Rating: 6

Performance Outlook
While the Fidelity Quality Factor ETF (FQAL) has exhibited a slight decline of -1.59% year-to-date, it has achieved a commendable return of 12.5% over the past year. This mixed performance could indicate volatility in larger market trends affecting investor sentiment. The fund's beta of 0.98 suggests it is closely aligned with market movements, highlighting that it maintains a lower risk profile compared to the market average.

The ETF's expense ratio of 0.16% positions it as a cost-effective option compared to competitors, supporting a more favorable long-term return. Notably, with a 12-month trailing dividend yield of 1.28%, FQAL may appeal to income-focused investors seeking consistent cash flow.

Sector Allocation and Holdings
Offering substantial exposure to the Information Technology sector (28.80%), the ETF concentrates its risk in areas of high market demand and growth potential. Key holdings, including Apple Inc. (AAPL), Microsoft Corp. (MSFT), and Nvidia Corp. (NVDA), contribute significantly to its performance metrics, indicating reliance on these tech giants.

The performance of these companies has shown resilience recently, with AAPL and MSFT continuing to innovate and expand their market positions, while NVDA has been a leader in the AI and GPU markets. This may contribute to overall positive investor sentiment around the ETF.

Market Impact
As FQAL is directly tied to these major companies, any fluctuations in their stock prices will significantly impact its performance. The ETF’s Zacks ETF Rank of 2 (Buy) showcases expectations for positive returns based on its quality factor strategy. Such rankings can sway investor decisions, leading to potential inflows into or outflows from the ETF.

In conclusion, while current metrics indicate a stable but slightly negative performance, FQAL possesses attributes that may lead to future growth, particularly if technology continues to perform robustly in the broader market.

Stocks: AAPL MSFT NVDA