The Best Fidelity ETFs of March 2024
| ETF Name and Ticker | Expense Ratio |
|---|---|
| Fidelity MSCI Information Technology Index ETF (FTEC) | 0.84% |
| Fidelity Sustainable U.S. Equity ETF (FSST) | 0.59% |
| Fidelity High Dividend ETF (FDVV) | 0.15% |
| Fidelity Low Volatility Factor ETF (FDLO) | 0.15% |
| Fidelity Low Duration Bond Factor ETF (FLDR) | 0.15% |
| Fidelity EV and Future Transportation ETF (FDRV) | 0.39% |
| Fidelity MSCI Real Estate Index ETF (FREL) | 0.084% |
Best Technology ETF
Fidelity MSCI Information Technology Index ETF (FTEC)
Expense Ratio
0.084%
Dividend Yield
0.72%
10-Year Avg. Ann. Return
20.08%
0.084%
0.72%
20.08%
Why We Picked It
The Fidelity MSCI Information Technology Index ETF invests only in technology sector stocks. And that sector has sizzled for the past decade. The Morningstar tech category has trounced the overall U.S. stock market by well over 20% in that span.
One reason this ETF has been among the top-most performers in its peer group has been its low annual expense ratio, roughly just one-tenth its peer group’s average.
While FTEC is wall to wall tech stocks, it does follow some risk control rules. FTEC’s benchmark is the MSCI USA IMI Information Technology 25/50 Index. One guardrail for the index and FTEC is that, at the end of each quarter, no more than 25% of the index or fund’s assets can be in a single stock. Another limitation involves stocks whose weights in the portfolio exceed 5%. The sum of those stocks’ weights cannot exceed 50% of FTEC’s total assets. If you want a high-octane tech fund, include FTEC in your search.
Best Sustainable Investing ETF
Fidelity Sustainable U.S. Equity ETF (FSST)
Expense Ratio
0.59%
Dividend Yield
0.63%
Avg. Ann. Return Since Inception (June 2021)
8.38%
Why We Picked It
Launched in June 2021, the Fidelity Sustainable U.S. Equity ETF is a good choice for investors seeking an active management approach to ESG investing. The fund’s goal is long-term growth, with at least 80% of its holdings in U.S. companies that have strong ESG sustainability practices. The fund leans toward smaller, faster-growing firms, which might lead to a bit more volatility.
FSST’s benchmark is the Russell 3000 Index, a market-cap weighted index that tracks the 3,000 largest U.S. stocks. The fund’s top five sectors are technology, health care, financial services, consumer discretionary stocksand industrials. Among the 10 largest holdings are Microsoft, Procter & Gamble (PG), Danaher (DHR) and Merck (MRK).
FSST Chart by TradingView
Best Dividend ETF
Fidelity High Dividend ETF (FDVV)
Expense Ratio
0.15%
Dividend Yield
3.64%
Avg. Ann. Return Since Inception (September 2016)
11.78%
0.15%
3.64%
11.78%
Why We Picked It
The Fidelity High Dividend ETF is a good pick for investors who want the cash flow and reinvestment opportunities that dividendscan provide. FDVV is a passively managed fund that aims to approximate the performance of the Fidelity High Dividend Index, which includes large- and mid-capdividend paying firms with both sustainable and growing payouts.
FDVV’s annualized returns beat its benchmark’s over the past one, three and five years. The fund’s top-10 holdings comprise about 30% of the fund’s portfolio. They lean towards large-cap companies. The current largest holdings in FDVV include Apple, Microsoft, Exxon Mobil (XOM), Chevron (CVX), Coca-Cola (KO) and Caterpillar (CAT).
FDVV Chart by TradingView
Best Low-Risk Equity ETF
Fidelity Low Volatility Factor ETF (FDLO)
Expense Ratio
0.15%
Dividend Yield
1.29%
Avg. Ann. Return Since Inception (September 2016)
12.94%
0.15%
1.29%
12.94%
Why We Picked It
Investors who’d like portfolio insurance against large market drawdowns, like we saw in 2022 and in parts of 2020, might consider the Fidelity Low Volatility Factor ETF. During the previous five years, FDLO had a standard deviation of just over 15 in contrast with that metric above 17 for Morningstar large cap blend category of funds—FDLO’s peer group. That means FDLO had smaller wild ups and downs amid market volatility than its direct rivals on average. Meanwhile, FDLO’s dividend yield is higher than its peer group’s average.
So, FDLO has offered a smoother ride, comparable returns and higher income yield than its most avid competitors.
FDLO is predominantly a large-cap stock fund. Its top-10 holdings comprise roughly 30% of the portfolio. Those positions include Microsoft, Alphabet (GOOGL), Apple, UnitedHealth (UNH), Johnson & Johnson (JNJ), Visa (V) and Mastercard (MA).
FDLO Chart by TradingView
Best Bond ETF
Fidelity Low Duration Bond Factor ETF (FLDR)
Expense Ratio
0.15%
Dividend Yield
5.44%
Avg. Ann. Return Since Inception (June 2018)
2.44%
0.15%
5.44%
2.44%
Why We Picked It
Choosing a good bond fund in a rising interest rate environment can be tricky. That’s because when interest rates are increasing, bond values decline. The Fidelity Low Duration Bond Factor ETF attempts to counter this effect by investing only in bonds that mature within one year or less, which should limit drawdowns and increase dividend yields when rates are rising.
More than 90% of FLDR’s bonds carry credit ratingsof AAA, AA or A. Around 80% are corporate bonds with only about 10% government issues. (Most of the balance consists of cash or equivalents.) Investors looking for capital preservation and diversification might consider FLDR as part of their cash and fixed income allocation. An alternative for this category might be a money market fund, which offers lower current yields but stable value.
FLDR Chart by TradingView
Best Sector ETF
Fidelity Electric Vehicles and Future Transportation ETF (FDRV)
Expense Ratio
0.39%
Dividend Yield
0.28%
Avg. Ann. Return Since Inception (October 2021)
-19.72%
0.39%
0.28%
-19.72%
Why We Picked It
Climate change and high crude oil prices suggest that the demand for electric vehicles (EVs) will likely increase over the long term. Just be aware that sector investing is riskier than choosing broadly diversified ETFs, and can lead to greater losses should a market sector suffer declines.
Launched in October 2021, the Fidelity Electric Vehicles and Future Transportation ETF is concentrated with only about 60 holdings, mainly stocks. FDRV’s top 10 account for roughly 35% of the portfolio. The passively managed fund benchmarks its performance against the Fidelity Electric Vehicles and Future Transportation Index.
Top holdings include Tesla (TSLA), Analog Devices (ADI), NXP Semiconductors (NXPI), Infineon Technologies (IFNNY) and Aptiv (APTV). Investors who believe in the future of EVs and energy efficient transportation might add a sliver of FDRV to an already diversified portfolio.
FDRV Chart by TradingView
Best Real Estate ETF
Fidelity MSCI Real Estate Index ETF (FREL)
Expense Ratio
0.084%
Dividend Yield
3.84%
Avg. Ann. Return Since Inception (February 2015)
4.33%
0.084%
3.84%
4.33%
Why We Picked It
The Fidelity MSCI Real Estate Index ETF is a low-fee, passively managed real estate investment trust (REIT) fund that tracks the MSCI USA IMI Real Estate Index. Although rising interest rates can hurt fixed income investors, inflation can help grow real estate prices. Since REITs are required to pay out at least 90% of their taxable income to shareholders in the form of dividends, you can expect a reliable income stream from FREL.
FREL’s annualized one-, two-, three- and five-year returns beat their Morningstar category’s averages. The top 10 holdings comprise more than 40% of the fund’s portfolio, and include REIT heavyweights like American Tower (AMT), Prologis (PLD), Crown Castle (CCI), Equinix (EQIX), Public Storage (PSA), Digital Realty (DLR) and Welltower (WELL).
FREL Chart by TradingView
*Data is sourced from Morningstar Direct unless noted otherwise and is current as of March 4, 2024; returns since inception are current as of February 29, 2024.
Methodology
The 51 ETFs in Fidelity’s stable comprise a more modest selection than the firm’s mutual fund lineup. In fact, Fidelity has launched most of these funds only recently, and it still doesn’t offer a complete set of low-fee, passively managed, broad market core funds you’d want for a well-diversified investment portfolio. Given this reality, we have screened for the best Fidelity ETFs using a blend of art and science. The goal was to cull a list of diversified ETFs that would suit a variety of investors and perform well in the current market environment. First, we categorized Fidelity’s funds by passive and active strategies, and sought a mix of the two types for our final list. Although we considered expense ratios, it was not a top screening feature, as actively managed funds are generally more expensive than passive ETFs. We examined the fund types and eliminated the majority of sector funds because they are limited in nature. The exceptions were the REIT fund (FREL), since real estate is typically considered a desirable asset class for diversified portfolios, and also threw in the EV fund pick (FDRV). To round out the list, we chose a mix of investment strategies. The dividend and ESG funds were included due to their popularity with investors. While the low-duration bond fund was the only fixed income fund with a decent possibility of positive returns during the near term. From this list, users have a good opportunity to uncover ETFs to round out a diversified investment portfolio. To learn more about our rating and review methodology and editorial process, check out our guide on how Forbes Advisor rates investing products.
About Fidelity Investments
Fidelity Investments is among the largest and most successful financial services companies on earth, with more than $4.5 trillion in assets under management as of July 2022. Founded in 1946, with roots in the Fidelity Fund established in 1930, innovation has long been at the forefront of the business, especially in mutual funds. Fidelity pioneered the practice of regularly updating a mutual fund’s net asset value (NAV) and was the first firm to offer same-day trading of fund shares.
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