FELC ETF

While some debate the merits of active versus passive investment, advisors and investors no longer have to choose one over the other. The Fidelity Enhanced ETFs offer the best of both worlds by providing exposures similar to core equity benchmarks but with the benefits of active management.

Many funds exist for equity investors, but few combine the benefits of core exposures alongside active management. The Fidelity Enhanced ETF suite seeks to outperform its benchmarks through its active strategy.

Fidelity® Enhanced Large Cap Core ETF offers active large-cap positioning based on fundamentals. Top holdings and sector weightings show minimal differentiation from passive indices. Peer comparison shows underperformance compared to passive S&P 500 ETF, raising skepticism about the fund's value.

Ever since FELC launched as an active and transparent ETF in November 2023, it has shown promising performance, outperforming some S&P 500-tracking ETFs. My assessment indicates that FELC is a more streamlined, growth-oriented, and slightly more affordable alternative to IVV, which tracks the S&P 500. FELC also includes exposure to companies outside of the S&P 500. While it is worth keeping an eye on, I am hesitant to recommend buying it at this time due to its limited history as an active ETF.

There are many options available to investors seeking core equity exposure, but the Fidelity Enhanced ETF equity suite is worth considering. These ETFs were previously mutual funds and have a track record of over 15 years, aiming to outperform their benchmarks.

Active ETFs have become more popular in recent years, with many investors incorporating them into their portfolios. In a crowded market of options, FELC, the Fidelity Enhanced Large Cap Core ETF, may catch the eye of investors seeking an active equity ETF.

FELC: An Ideal Pick For Marginal But Long-Term Alpha Generation

Last year saw active investing take the ETF universe by storm. From the ETF rule's arrival back in 2019 to a growing trend of mutual fund conversions, active ETFs have gained significant interest with their goal to navigate volatility and seek outperformance.

Fidelity Investments' leaders joined VettaFi's head of research, Todd Rosenbluth, on a recent webcast to discuss the firm's conversion of several existing strategies from mutual funds to ETFs. The conversions saw six of Fidelity Investments' enhanced equity strategies become ETFs, like the Fidelity Enhanced Large Cap Core ETF (FELC).