Fidelity International Multifactor ETF

FDEV

Market cap $192M

For many investors, building a diversified portfolio is one of the first steps in investing. Fidelity Investments' extensive range of ETFs offers a powerful toolkit to achieve this.

FDEV is a passively managed ETF that leverages a sophisticated, factor-driven strategy applied to the developed world equities. At this point, FDEV has a Japan-heavy portfolio with a low P/E and financials as the key sector. Its overlap with IDEV is close to 100%. Unfortunately, its long-term returns have been mostly a disappointment, as it has trailed SCHF and IDEV, as well as a few peers.

The market regime may continue to shift in response to easing rates, potentially serving as a catalyst for SMIDcap and mid-cap companies. The rate cut cycle is expected to provide more relief for smaller and more leveraged companies needing more access to capital markets than larger companies.

Market volatility remains a fairly persistent aspect for investors to contend with in the back half of the year. With elevated short-term volatility risks in the fourth quarter, Fidelity offers five ETFs worth consideration, including a screen for lower volatility stocks.

Factor investing allows for targeted equity exposure for those seeking specific investment outcomes. For example, factors may be used to enhance a portfolio's risk and return profile or help generate income.