Français Watch list Search Login Price & Performance Mutual funds ETFs Investor education Expert insights Advisor resources Share Print E-Mail Investing in factors What is factor-based investing? A factor is a measurable characteristic of a group of securities or stocks that, over time, exhibit certain risk and return features. Building factor-based investment strategies involves screening companies based on well-known characteristics that help explain a security’s risk and return behaviours. Investors can incorporate exchange traded funds (ETFs) to help meet certain objectives over the long term. Six most common style factors Seeks excess returns from stocks that have higher-than-average dividend yields. Targets securities with lower risk than the broader market, as well as stable earnings. Targets companies with stable profitability and cash flows, a lack of excessive leverage or better credit quality. Finds securities with improving fundamentals that have recently outperformed and may continue to do so over the medium term. Seeks lower-cost securities that are undervalued relative to their intrinsic value. Seeks the excess returns of smaller firms (by market capitalization) relative to their larger counterparts. Five reasons to consider factor investing for your portfolio Strategic exposure Get strategic with your asset allocation. Investing in certain factors can help offset exposure to downside risk in other assets or help increase exposure to potential upside opportunities over the long term. Cyclical exposure Align your portfolio with current and future cyclical market cycles. Some factors may strengthen your portfolio during the early to mid-cycle phase, while others may help your portfolio benefit from late and recessionary stages in the cycle. Portfolio construction Craft your portfolio from the ground up using a combination of factors that align with your investment goals and risk profiles. Among options for low volatility, dividends or quality, your preferences are a key factor. Enhanced returns Improve long-term performance potential by targeting factors that have historically outperformed broad market indexes. Risk management Reduce concentration risk through an equal active overweight approach to portfolio construction. The Fidelity FactorTM Factor investing is a meaningful component of our investment capabilities. Fidelity Factor ETFs are outcome-oriented investments with the goal to help you achieve your financial goals, by capturing factor-based opportunities the market may miss. How does Fidelity’s factor approach compare? Passive ETF Market-cap weighted approach, little to no research involved in the creation of the product Seeks to track a broad-market index (e.g., S&P 500) Provides exposure to securities within a broad-market index Fidelity Factor ETF Active in design. Passive in execution. Uses decades of quantitative research and fundamental analysis to create factor-based indexes Seeks to outperform a broad-market index by tracking a custom-built index Indexed for exposure to factors: dividend, low volatility, quality, momentum and value Active mutual fund Portfolio managers select each investment Seeks to outperform a broad-market index (e.g., S&P 500) Seeks to buy high-performing securities and avoid low-performing securities Consider the following Fidelity Factor ETFs Fidelity Dividend Factor ETFs Fidelity Low Volatility Factor ETFs Fidelity High Quality Factor ETFs Fidelity Momentum Factor ETFs Fidelity Value Factor ETFs ETF ticker lookup ETF education centre Gain a deeper understanding of factor investing at the Fidelity education centre. Visit the education centre Share Share on Facebook Share on LinkedIn Share on Twitter Show legal Commissions, fees and expenses may be associated with investment funds. Read a fund’s prospectus or offering memorandum and speak to an advisor before investing. Funds are not guaranteed, their values change frequently and investors may experience a gain or loss. Past performance may not be repeated. Read our privacy policy. By using or logging in to this website, you consent to the use of cookies as described in our privacy policy. This site is for persons in Canada only. Mutual funds and ETFs sponsored by Fidelity Investments Canada ULC are only qualified for sale in the provinces and territories of Canada. 112327-v202161 Back to top of page LinkedIn Twitter YouTube Instagram Fidelity Investments Canada ULC © 2021 Fidelity Investments Canada ULC. All rights reserved. Fidelity Investments is a registered trademark of Fidelity Investments Canada ULC. 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