Fidelity International Value Factor ETF

FIVA

Market cap $503M

Growth stocks that propelled the market in 2025 have raised questions as to whether their current valuations align with their fundamentals. This uncertainty is helping to bring value investing back into the forefront.

Shopping for Fidelity exchange-traded funds (ETFs)? A good place to start is by looking at the top nine performers of 2025, all of which returned over 27% last year.

Don't look now, but markets may be poised for a value rotation. Each year, market uncertainty sees headlines and narratives about a potential value rotation grow.

Fidelity International Value Factor ETF offers diversified exposure to large-cap value stocks in developed international markets. FIVA has outperformed the EFA benchmark since inception and delivered strong recent returns, but lags some peers like DFIV and EFV over the past four years. Despite recent outperformance, it remains premature to declare a sustained comeback for the value factor.

I am cautious about overheated U.S. markets and seek value in overlooked areas like the Fidelity International Value ETF (FIVA). FIVA offers exposure to large- and mid-cap developed international stocks with relatively attractive valuations, trading at a reasonable 16x P/E ratio. The ETF's 3.49% dividend might seem appealing, but its distributions have been volatile due to currency impacts and cyclical holdings.

For investors heavily weighted toward U.S. growth equities, international ETFs could be a useful diversification play for portfolios. Developed-market international equities, particularly in Europe, appear to have significant upside before reaching their long-term valuation levels relative to the S&P 500, according to recent research from Fidelity Investments.

As investors seek out attractive opportunities in the current market, international ETFs are gaining favor among many. Europe and other developed-market equities were the top-performing regions during the first quarter, with each benefiting from a weaker dollar.

International developed market stocks are outpacing U.S. stocks in 2025, a rare occurrence since 2014.  Fidelity International Value Factor ETF is outperforming SPDR® S&P 500® ETF this year. FIVA invests in global ex-U.S. value stocks across diversified sectors and market capitalizations.  The analysis aims to determine why FIVA is beating SPY by reviewing holdings, distributions, and portfolio strategy. Since both factor I see that are benefiting FIVA over SPY could end at any time, I gave the ETF a Hold rating.

Have tariffs on the mind? U.S. investors facing market turbulence may be inclined to look for diversification abroad.

As advisors look to diversify client portfolios, international equity ETFs may be worth consideration. Diversification should be a key area of focus this year, amid an uncertain economic outlook and potential for uneven market returns after the policy changes implemented by the new administration.