FDLO ETF

FDLO invests in around 130 large-cap U.S. stocks that have low volatility, aiming to balance returns and risks while keeping costs low at 0.15%. The fund has a strong focus on technology companies like Apple, Microsoft, Alphabet, and Amazon, which enhances its growth prospects over time. Additionally, FDLO provides better protection against losses compared to the overall market, especially during downturns, because of its emphasis on low volatility and value stocks.

FDLO's performance reflects an optimized portfolio with relatively low volatility compared to the broader stock market index. FDLO is a fund worth considering for the long run, as it balances exposure to higher-growth areas while limiting the risk associated with more volatile names and industries. FDLO's heavy allocation to the technology is perhaps the biggest risk for this fund at this moment, as investors seem to be unwinding bullish bets on market leaders.

Low volatility ETFs can be used to potentially safeguard gains and protect against market turbulence. Wall Street's popular measure of expected volatility in the stock market recorded its largest-ever intraday jump on Monday.

Fidelity Low Volatility Factor ETF is invested in 125 stocks with relatively low historical volatility of prices and earnings. Since its inception, the FDLO ETF has lagged the S&P 500 index, but outperformed other low-volatility ETFs. FDLO risk-adjusted returns compared to the benchmark are unconvincing, but its track record is too short to assess its long-term potential.

FDLO: Simplicity, Cost, Performance Make This ETF A Buy

Factor ETFs hit the ETF market over the last decade, offering a way to seek outperformance and/or manage risk better than broader indexes by targeting stocks that display specific traits or characteristics. In an ever-growing ETF ecosystem, factor strategies could potentially play a significant role for investors shifting their portfolios towards ETFs.

Is now the time to revisit volatility as a key investing metric? Economic and political factors in the U.S. and globally may add to interest in a fund like the Fidelity Low Volatility Factor ETF (FDLO).

Fidelity® Low Volatility Factor ETF tracks an index of large-cap and mid-cap diversified U.S.-based stocks that have relatively low volatility. Its stock selection has turned out to be quite good so far. FDLO's top holdings are in healthcare and technology-oriented stocks, and the fund has been able to generate consistently strong total returns over the years. During an economic downturn, low-volatility stocks reduce risk of uncertainty, but FDLO's emphasis on technology stocks might lead to short-term downfall.