As the economy continues to expand, with shifting fiscal and monetary policies, ETF investors may look to Fidelity’s tested management styles and fundamental strategies to potentially enhance returns and limit risks.
“We’re more traditionally known as a fundamental investment shop,” Darby Nielson, Managing Director of Research for Fidelity Institutional Asset Management, said at the recent Morningstar ETF Conference. “Factors have been integrated in our active investment process for many, many years now.
“Over the years, we’ve built a 3,000 factor library with built models for all of our portfolio managers, and all that has been a collaboration,” Nielson added.
Their factor models try achieve three things the management teams want to achieve, which include targeted exposure for the factor, reduced unintended risks and competitive performance.
Investors can turn to factor-based investment strategies and ETFs as a way to better manage risks and capture market moves. The factor-based ETFs may help investors seek out factor exposures for return/outcome potential and risk management.
For example, investors can look to Fidelity’s line of factor based ETFs, including Fidelity Dividend ETF for Rising Rates (NYSEArca: FDRR), Fidelity Low Volatility Factor ETF (NYSEArca: FDLO), Fidelity Momentum Factor ETF (NYSEArca: FDMO), Fidelity Quality Factor ETF (NYSEArca: FQAL), Fidelity Value Factor ETF (NYSEArca: FVAL) and Fidelity Core Dividend ETF (NYSEArca: FDVV).
The line of Fidelity factor based ETFs can help investors achieve strategic and cyclical exposure, along with filling out an investment portfolio construction. By incorporating the various factor based ETFs into an investment portfolio, investors may be better able to diminish risks and still capture any upside potential.