Using high quality factor ETFs

Quality investing focuses on finding companies that generate solid profits, possess strong balance sheets, demonstrate stable cash flows and lack excessive leverage — the typical hallmarks of quality companies. Historically, securities of these companies have been more profitable, generated higher earnings and tended to outperform their peers over time.

What is a quality factor?

The quality factor targets companies with stable profitability and cash flows, a lack of excessive leverage or have a better credit quality.

  • Typically defined as companies with durable business models and sustainable competitive advantages
  • Common ways to measure the quality of a company are its return on equity and leverage

Why does it matter?

Companies that generate profits higher than their cost of capital, with stable cash flows and good balance sheets, can provide outperformance over time

For a company to have higher margins and profits than its competitors, it must have some competitive advantage that allows it to earn higher profits relative to its invested capital

Consistent with the philosophy that stocks follow earnings, higher-quality companies with stable earnings and cash flows can outperform over time


Fidelity Canada High Quality Index ETFs

Fidelity Canadian High Quality Index ETF

Ticker symbol
FCCQ

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Fidelity U.S. High Quality Index ETF
 

Ticker symbol
FCUQ

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Fidelity U.S. High Quality Currency Neutral Index ETF

Ticker symbol
FCQH

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Fidelity International High Quality Index ETF

Ticker symbol
FCIQ

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Also available as mutual funds which invest in the underlying ETFs:

Fidelity Canadian High Quality Index ETF Fund

Fidelity U.S. High Quality Index ETF Fund

Fidelity U.S. High Quality Currency Neutral Index ETF Fund

Fidelity International High Quality Index ETF Fund

Fidelity for quality factor-based investment strategy

At Fidelity, our quality factor funds seek to track the performance of tailor-made indexes that are actively designed. The Fidelity Canada High Quality Factor Index is designed to reflect the performance of stocks with a higher quality profile than the broader market. Typically, higher-quality companies have tended to outperform their peers over time.

Single-factor exposure to companies with solid profits, strong balance sheets and stable cash flows

An outcome-oriented approach that has the potential to outperform over time

An efficient complement to a well-diversified portfolio

ETF education centre

Gain a deeper understanding of factor investing at the Fidelity education centre.

 

How to buy Fidelity ETFs

Make the most of your hard earned money with Fidelity ETFs.

Read a fund’s or pool’s prospectus or offering memorandum and speak to an advisor before investing. 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.

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