Invest in what you know.
This was the time-tested advice of Fidelity’s legendary fund manager Peter Lynch, who long espoused the value of putting in the work to research individual stocks.
Of course, many investors don’t have the time or inclination to spend their days digging through annual reports, so they entrust this work to professional fund managers—people who live and breathe stock analysis.
But taking this route can often lead investors to yet another dilemma: Which managers to invest with?
A line of Fidelity ETFs aims to help, by bringing together the top ideas from a team of active equity managers. And they’re being offered with the potential tax efficiencies and competitive prices that investors have come to expect from ETFs.
The enduring appeal of fundamental analysis
The concept of researching stocks one by one, which is also known as “fundamental” or “bottom-up” analysis, is as old as the stock market itself.
Through deep-dive research into a company’s finances, competitive environment, advantages, and weaknesses, managers and analysts may be able to identify the winners or losers of tomorrow and position their investors to benefit accordingly.
A thoughtful, human stock picker can bring curiosity, perspective, and a steady hand through the unpredictable twists and turns of the market, providing unique potential value.
Distilling fund managers’ top ideas
At any given point in time, a particular fund manager might feel that a few stocks, or a few dozen stocks, could offer opportunity—depending on the market environment and their investing approach.
A set of active ETFs from Fidelity aims to consolidate such high-conviction ideas. Each ETF seeks to bring ideas from multiple managers into a single investment, so investors can access stock picks from active equity portfolio managers in one place.
For example, Fidelity® Fundamental Large Cap Core ETF (
“The aim is to give investors the best ideas, from a group of seasoned portfolio managers, in a single portfolio,” says Benjamin Treacy, institutional portfolio manager for Fidelity.
All of the Fundamental ETFs currently available follow a similar investment approach. Each one starts with a given asset class, like large-cap value stocks, or emerging-market stocks. A group of Fidelity fund managers who invest in that asset class is selected—with an emphasis on bringing in managers with diverse approaches and points of view, plus strong track records. The ETFs’ portfolios are built using a systematic process that identifies each manager’s high-conviction ideas, by comparing their holdings against their respective index.
Aiming for consistency and efficiency
The ETFs are managed to make sure they stay consistent to their respective asset classes and styles. This can help with the risk of “style drift,” which could occur if, say, a small-cap manager started to gravitate disproportionately toward large-cap stocks. They also provide diversification among managers and approaches, reducing the risk that one manager puts a significant dent in performance. Finally, they’re managed with an aim of consistently outperforming their respective indexes (though future performance is of course never guaranteed).
“This offers the collective wisdom of these portfolio managers,” says Treacy. “And the management process combines this wisdom with risk management and disciplined portfolio construction, with a goal to achieve more consistent results.”
In addition to that management process, they offer the benefits of an ETF structure, which are well-documented. In this case, what can be particularly helpful for long-term investors are the added potential tax efficiencies that ETFs can provide, such as the potential for fewer taxable capital gains distributions for buy-and-hold investors, and the ease of trading of an ETF structure.
Features of Fidelity Fundamental ETFs
Here is more on both the potential advantages and risks of the Fidelity Fundamental ETF lineup.
Building-block structure
By providing diversified, consistent exposure to a specific stock style, each ETF is structured so that investors can potentially use them as building blocks in constructing their long-term asset allocation.
Competitively priced access to active management
Thanks to efficiencies and the systematic management process, these ETFs can be offered at a competitive cost point.
Differentiated potential performance
Through the active stock selection of multiple underlying fund managers, the ETFs seek to help mitigate risks associated with a single-manager approach, while seeking to outperform their respective indexes. But as with any type of investing, there is no guarantee that these active ETFs will beat their indexes, and it is also possible they could underperform.
Diversification
In addition to providing broad diversification among individual stocks, sectors, and industries, these ETFs are also designed to provide diversification among managers, points of view, and investing approaches.
Potential tax efficiencies
Due to the unique process ETFs follow when creating and redeeming shares, ETFs can generate fewer, or lower, annual taxable distributions than traditional mutual funds.
Learn more
Investors interested in learning more can read more about ETFs, browse the full list of Fidelity ETFs, or search for ETFs that match their investment objective using Fidelity’s ETF Screener.
Below is a complete list of Fidelity’s Fundamental ETFs, as of May 2025:
- Fidelity® Fundamental Large Cap Core ETF (
) - Fidelity® Fundamental Large Cap Growth ETF (
) - Fidelity® Fundamental Large Cap Value ETF (
) - Fidelity® Fundamental Small-Mid Cap ETF (
)1 - Fidelity® Fundamental Developed International ETF (
) - Fidelity® Fundamental Emerging Markets ETF (
) - Fidelity® Fundamental Global Ex-US ETF (
)
Investors can view top-10 holdings, performance data, and other information by looking up each ETF’s ticker symbol on Fidelity.com.
1. These ETFs are different from traditional ETFs. Traditional ETFs tell the public what assets they hold each day. These ETFs will not. This may create additional risks for your investment. For example, you may have to pay more money to trade the shares of these ETFs. These ETFs will provide less information to traders, who tend to charge more for trades when they have less information; the price you pay to buy ETF shares on an exchange may not match the value of each ETF’s portfolio. The same is true when you sell shares. These price differences may be greater for these ETFs compared to other ETFs because they provide less information to traders; these additional risks may be even greater in bad or uncertain market conditions; each ETF will publish on Fidelity.com and i.Fidelity.com a "Tracking Basket" designed to help trading in shares of the ETF. While the Tracking Basket includes some of the ETF’s holdings, it is not the ETF’s actual portfolio. The differences between these ETFs and other ETFs may also have some advantages. By keeping certain information about the ETFs secret, they may face less risk that other traders can predict or copy their investment strategy. This may improve the ETFs’ performance. If other traders are able to copy or predict the ETF’s investment strategy, however, this may hurt the ETF’s performance. For additional information regarding the unique attributes and risks of these ETFs, see section below.