The Fidelity Low Volatility Factor ETF (FDLO) seeks to provide investment returns that correspond to an index that is designed to reflect the performance of large- and mid-capitalization U.S. stocks with lower volatility than the broader market.
FDLO hunts from the 1,000 largest U.S. stocks for those with low volatility in returns and earnings. The fund uses a scoring system, based on three metrics: low volatility of returns, low earnings volatility and low beta (a measure of volatility compared to the market). FDLO has $53.94 million in total assets in its holdings, which are rebalanced twice annually.
So far, 2018 has been a year of high volatility. As a result, low volatility ETFs are among the most popular â??smart beta,â? or factor-based, funds on the market. One of the cornerstones of factor investing is the low-volatility factor.