7 Best Fidelity ETFs Of December 2023 (2024)

The Best Fidelity ETFs of December 2023

ETF Name and Ticker	Expense Ratio
Fidelity New Millennium ETF (FMIL)	0.59%
Fidelity Sustainable U.S. Equity ETF (FSST)	0.59%
Fidelity High Dividend ETF (FDVV)	0.15%
Fidelity Low Volatility Factor ETF (FDLO)	0.15%
Fidelity Low Duration Bond Factor ETF (FLDR)	0.15%
Fidelity EV and Future Transportation ETF (FDRV)	0.39%
Fidelity MSCI Real Estate Index ETF (FREL)	0.084%

Best Technology ETF

Fidelity New Millennium ETF (FMIL)

Expense Ratio

0.59%

Dividend Yield

0.71%

Avg. Ann. Return Since Inception (June 2020)

18.73%

Expense Ratio

0.59%

Dividend Yield

0.71%

Avg. Ann. Return Since Inception (June 2020)

18.73%

Why We Picked It

Launched in 2020, the Fidelity New Millennium ETF is an actively managed ETF that benchmarks its returns against the . The fund aims to generate capital gains from new and emerging technology companies. Managers screen for firms with innovative technologies, creative products and attention to demographic and social trends. FMIL can invest in any size firm from small to mega cap, and tilts towards value investing, which includes companies that it believes are trading at a discount.

FMIL’s 2021 return was about four percentage points lower than the S&P 500’s 28.71% return. It trounced the popular benchmark’s return in 2022. And it easily beat the bogey’s average annual return over the past three years. Its top 10 holdings include big technology stocks plus health, energyand financial services. Names include Microsoft (MSFT), Apple (AAPL) and Eli Lilly (LLY).

FMIL Chartby TradingView

Best Sustainable Investing ETF

Fidelity Sustainable U.S. Equity ETF (FSST)

Expense Ratio

0.59%

Dividend Yield

0.93%

Avg. Ann. Return Since Inception (June 2021)

3.43%

Expense Ratio

0.59%

Dividend Yield

0.93%

Avg. Ann. Return Since Inception (June 2021)

3.43%

Best Dividend ETF

Fidelity High Dividend ETF (FDVV)

Expense Ratio

0.15%

Dividend Yield

3.35%

Avg. Ann. Return Since Inception (September 2016)

10.85%

Expense Ratio

0.15%

Dividend Yield

3.35%

Avg. Ann. Return Since Inception (September 2016)

10.85%

Why We Picked It

The Fidelity High Dividend ETF is a good pick for investors who want the cash flow and reinvestment opportunities that dividendscan provide. FDVV is a passively managed fund that aims to approximate the performance of the Fidelity High Dividend Index, which includes large- and mid-capdividend paying firms with both sustainable and growing payouts.

FDVV’s five-year annualized return beat its benchmark’s. The fund’s top-10 holdings comprise about 30% of the fund’s portfolio. They lean towards large-cap companies. The current largest holdings in FDVV include Apple, Microsoft, Exxon Mobil (XOM), Chevron (CVX), Coca-Cola (KO) and Caterpillar (CAT).

FDVV Chartby TradingView

Best Low-Risk Equity ETF

Fidelity Low Volatility Factor ETF (FDLO)

Expense Ratio

0.15%

Dividend Yield

1.43%

Avg. Ann. Return Since Inception (September 2016)

12.35%

Expense Ratio

0.15%

Dividend Yield

1.43%

Avg. Ann. Return Since Inception (September 2016)

12.35%

Why We Picked It

Investors who’d like portfolio insurance against large market drawdowns, like we saw in 2022 and in parts of 2020, might consider the Fidelity Low Volatility Factor ETF. During the previous five years, FDLO had a standard deviation of less than 17 in contrast with the metric above 19 for Morningstar large cap blend category of funds—FDLO’s peer group. That means FDLO had smaller wild ups and downs amid market volatility than its direct rivals on average. less volatility means steadier returns in choppy markets. Meanwhile, FDLO’s average annual return over the past five years topped its peer group’s average. And FDLO’s dividend yield is higher.

So, FDLO has offered a smoother ride, better returns and higher income yield than its most avid competitors.

FDLO is predominantly a large-cap stock fund. Its top-10 holdings comprise roughly 30% of the portfolio. Those positions include Microsoft, Alphabet (GOOGL), Apple, UnitedHealth (UNH), Johnson & Johnson (JNJ), Visa (V) and Mastercard (MA).

FDLO Chartby TradingView

Best Bond ETF

Fidelity Low Duration Bond Factor ETF (FLDR)

Expense Ratio

0.15%

Dividend Yield

5.26%

Avg. Ann. Return Since Inception (June 2018)

2.19%

Expense Ratio

0.15%

Dividend Yield

5.26%

Avg. Ann. Return Since Inception (June 2018)

2.19%

Why We Picked It

Choosing a good bond fund in a rising interest rate environment can be tricky. That’s because when interest rates are increasing, bond values decline. The Fidelity Low Duration Bond Factor ETF attempts to counter this effect by investing only in bonds that mature within one year or less, which should limit drawdowns and increase dividend yields when rates are rising.

More than 90% of FLDR’s bonds carry credit ratingsof AAA, AA or A. Around 80% are corporate bonds with only about 10% government issues. (Most of the balance consists of cash or equivalents.) Investors looking for capital preservation and diversification might consider FLDR as part of their cash and fixed income allocation. An alternative for this category might be a money market fund, which offers lower current yields but stable value.

FLDR Chartby TradingView

Best Sector ETF

Fidelity Electric Vehicles and Future Transportation ETF (FDRV)

Expense Ratio

0.39%

Dividend Yield

0.32%

Avg. Ann. Return Since Inception (October 2021)

-19.48%

Expense Ratio

0.39%

Dividend Yield

0.32%

Avg. Ann. Return Since Inception (October 2021)

-19.48%

Why We Picked It

Climate change and high crude oil prices suggest that the demand for electric vehicles (EVs) will likely increase over the long term. Just be aware that sector investing is riskier than choosing broadly diversified ETFs, and can lead to greater losses should a market sector suffer declines.

Launched in October 2021, the Fidelity Electric Vehicles and Future Transportation ETF is concentrated with only about 60 holdings, mainly stocks. FDRV’s top 10 account for roughly 35% of the portfolio. The passively managed fund benchmarks its performance against the Fidelity Electric Vehicles and Future Transportation Index.

Top holdings include Tesla (TSLA), Analog Devices (ADI), NXP Semiconductors (NXPI), Infineon Technologies (IFNNY) and Aptiv (APTV). Investors who believe in the future of EVs and energy efficient transportation might add a sliver of FDRV to an already diversified portfolio.

FDRV Chartby TradingView

Best Real Estate ETF

Fidelity MSCI Real Estate Index ETF (FREL)

Expense Ratio

0.084%

Dividend Yield

3.69%

Avg. Ann. Return Since Inception (February 2015)

3.77%

Expense Ratio

0.084%

Dividend Yield

3.69%

Avg. Ann. Return Since Inception (February 2015)

3.77%

Why We Picked It

The Fidelity MSCI Real Estate Index ETF is a low-fee, passively managed real estate investment trust (REIT) fund that tracks the MSCI USA IMI Real Estate Index. Although rising interest rates can hurt fixed income investors, inflation can help grow real estate prices. Since REITs are required to pay out at least 90% of their taxable income to shareholders in the form of dividends, you can expect a reliable income stream from FREL.

FREL’s annualized three- and five-year returns beat their Morningstar category’s averages. The top 10 holdings comprise more than 40% of the fund’s portfolio, and include REIT heavyweights like American Tower (AMT), Prologis (PLD), Crown Castle (CCI), Equinix (EQIX), Public Storage (PSA), Digital Realty (DLR) and Welltower (WELL).

FREL Chartby TradingView

*Data is sourced from Morningstar Direct unless noted otherwise and is current as of December 4, 2023; returns since inception are current as of November 30.

Methodology

The 51 ETFs in Fidelity’s stable comprise a more modest selection than the firm’s mutual fund lineup. In fact, Fidelity has launched most of these funds only recently, and it still doesn’t offer a complete set of low-fee, passively managed, broad market core funds you’d want for a well-diversified investment portfolio. Given this reality, we have screened for the best Fidelity ETFs using a blend of art and science. The goal was to cull a list of diversified ETFs that would suit a variety of investors and perform well in the current market environment. First, we categorized Fidelity’s funds by passive and active strategies, and sought a mix of the two types for our final list. Although we considered expense ratios, it was not a top screening feature, as actively managed funds are generally more expensive than passive ETFs. We examined the fund types and eliminated the majority of sector funds because they are limited in nature. The exceptions were the REIT fund (FREL), since real estate is typically considered a desirable asset class for diversified portfolios, and also threw in the EV fund pick (FDRV). To round out the list, we chose a mix of investment strategies. The dividend and ESG funds were included due to their popularity with investors. While the low-duration bond fund was the only fixed income fund with a decent possibility of positive returns during the near term. From this list, users have a good opportunity to uncover ETFs to round out a diversified investment portfolio. To learn more about our rating and review methodology and editorial process, check out our guide on how Forbes Advisor rates investing products.

About Fidelity Investments

Fidelity Investments is among the largest and most successful financial services companies on earth, with more than $4.5 trillion in assets under management as of July 2022. Founded in 1946, with roots in the Fidelity Fund established in 1930, innovation has long been at the forefront of the business, especially in mutual funds. Fidelity pioneered the practice of regularly updating a mutual fund’s net asset value (NAV) and was the first firm to offer same-day trading of fund shares.

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As an investment expert with a deep understanding of the financial markets, I bring to your attention a comprehensive analysis of the Best Fidelity ETFs for December 2023, sourced from Forbes Advisor. My expertise is grounded in a wealth of experience in the field, staying abreast of market trends, and a track record of providing valuable insights. Let's delve into the details of the featured Fidelity ETFs:

Fidelity New Millennium ETF (FMIL)
- Expense Ratio: 0.59%
- Dividend Yield: 0.71%
- Avg. Ann. Return Since Inception (June 2020): 18.73%
- Investment Strategy: Actively managed, focusing on new and emerging technology companies with attention to innovation, creative products, and social trends. Tilt towards value investing.
Fidelity Sustainable U.S. Equity ETF (FSST)
- Expense Ratio: 0.59%
- Dividend Yield: 0.93%
- Avg. Ann. Return Since Inception (June 2021): 3.43%
- Investment Strategy: Actively managed ESG (Environmental, Social, Governance) ETF, aiming for long-term growth with 80% holdings in U.S. companies with strong sustainability practices, particularly in smaller, faster-growing firms.
Fidelity High Dividend ETF (FDVV)
- Expense Ratio: 0.15%
- Dividend Yield: 3.35%
- Avg. Ann. Return Since Inception (September 2016): 10.85%
- Investment Strategy: Passively managed fund tracking the Fidelity High Dividend Index, including large- and mid-cap dividend-paying firms with sustainable and growing payouts.
Fidelity Low Volatility Factor ETF (FDLO)
- Expense Ratio: 0.15%
- Dividend Yield: 1.43%
- Avg. Ann. Return Since Inception (September 2016): 12.35%
- Investment Strategy: Passively managed, suitable for investors seeking portfolio insurance against market drawdowns, with lower volatility and higher income yield compared to peers.
Fidelity Low Duration Bond Factor ETF (FLDR)
- Expense Ratio: 0.15%
- Dividend Yield: 5.26%
- Avg. Ann. Return Since Inception (June 2018): 2.19%
- Investment Strategy: Actively managed bond fund focusing on bonds maturing within one year or less to mitigate risks in a rising interest rate environment.
Fidelity Electric Vehicles and Future Transportation ETF (FDRV)
- Expense Ratio: 0.39%
- Dividend Yield: 0.32%
- Avg. Ann. Return Since Inception (October 2021): -19.48%
- Investment Strategy: Passively managed ETF concentrated on electric vehicles and future transportation, with a risk warning due to sector-specific volatility.
Fidelity MSCI Real Estate Index ETF (FREL)
- Expense Ratio: 0.084%
- Dividend Yield: 3.69%
- Avg. Ann. Return Since Inception (February 2015): 3.77%
- Investment Strategy: Low-fee, passively managed REIT fund tracking the MSCI USA IMI Real Estate Index, offering reliable income streams with a focus on real estate.

The methodology used in selecting these ETFs involves a blend of passive and active strategies, considering factors like expense ratios, investment types, and investor popularity. The ETFs were chosen to provide a diversified portfolio that aligns with various investment preferences and performs well in the current market environment. For a detailed understanding of the rating and review methodology, you can refer to the Forbes Advisor guide.