The Fidelity Factor

The power of factor investing in your portfolio

Getting to know factors

Consider a factor-based approach to building portfolios when seeking the potential for excess returns, more control over risk exposure or specific investment outcomes. Take a closer look at the six most common style factors that can affect your portfolio.


Low Volatility



Size



Value



Dividend Yield



High Quality



Momentum


Note: This is a hypothetical illustration of a typical business cycle. There is not always a chronological progression in this order, and there have been cycles in which the economy has skipped a phase or retraced an earlier one. Analysis is based on historical factor performance during business cycles since 1986. Factor performance patterns may vary in future cycles. Source: Fidelity Investments (Asset Allocation Research team).

Why should I focus on factors in my 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 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.

Fidelity Factor investment solutions

Fidelity
Dividend Factor
ETFs

With an investment process that targets dividend-paying companies, you can now complement your portfolio with a powerful, outcome-oriented approach that seeks to deliver monthly income and capital gains.

Fidelity
Low Volatility
Factor ETFs

Stay invested through market ups and downs. The primary objective of a low-volatility approach is to own stocks that have lower risk or return volatility than the broader market, which has historically resulted in higher risk-adjusted returns.

Fidelity
High Quality
Factor ETFs

Companies that generate superior profits, possess strong balance sheets and demonstrate stable cash flows have historically been able to provide consistent out performance over the long term.

The Fidelity Factor

Active in design, passive in execution

Active funds generally seek to outperform a broad market cap-weighted index

Passive funds generally track a traditional broad market cap-weighted index

  • Tracks the performance of tailor-made indices constructed by Fidelity Management and Research Company (FMR Co., Inc.)
  • Rules-based, transparent methodologies, designed to provide investors with exposure to targeted factors that may outperform over the longterm

Fidelity Management & Research Company

Our rich history of active portfolio management and quantitative research delivers powerful targeted investment insights.

First dedicated quantitive analysis hired

1965

1988

FMR Co. launches its first quantitive fund, Fidelity Disciplined Equity Fund

Dedicated fixed-income quantitive research team formed

1992

1998

Dedicated money market quantitive research team established

Fixed-income division lauches proprietary multifactor risk model

2005

2006

Equity quantitive research team formally established to complement fundamental capabilities

Equity team researches and launches global multifactor models, expanding their library over time

2007

2016

Research, development and launch of stand-alone equity factor products

The best and brightest of FMR Co.’s global factor capabilities available in Canada

2018