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Modernizing Value: Why FVAL Fits Today’s Market Rotation

BY | ETF Database
6:08 am ET 09/25/26 | 10 VIEWS
With ongoing market uncertainty fueled by higher-for-longer interest rates, geopolitical tensions, and other factors, more investors are turning to value. But investors may be missing the varying degrees of value exposure when comparing ETFs. For example, traditional value benchmarks often heavily overweight slow-growing, distressed sectors, while missing out on high-quality compounders. This is often referred to as the “value trap.” To avoid these traps, the Fidelity Value Factor ETF (FVAL B) offers a modern solution to antiquated value metrics by combining disciplined valuation screening with broad large- and mid-cap market exposure.Key Takeaways: The Fidelity Value Factor ETF combines disciplined valuation screening with broad market exposure to avoid traditional value traps while maintaining upside potential. By evaluating relative valuation metrics across the equity landscape, the fund includes mature, highly profitable technology leaders alongside established healthcare and financial companies. This factor-based approach allows investors to achieve value exposure while retaining access to key structural growth drivers in the economy. See More: Capitalizing on Rational Optimism: Fidelity Strategists’ 2026 Market OutlookA Systematic Approach to ValueUnderneath the hood of FVAL is a strategy that tracks the Fidelity U.S. Value Factor Index (the “Index”). The Index allocates its assets to large- and mid-capitalization U.S. companies with attractive valuation metrics. Additionally, the underlying index systematically identifies trading at compelling prices relative to their underlying value. FVAL’s methodology allows the fund to capture fundamental value across high-performing sectors that traditional value indexes frequently exclude. By evaluating relative valuation across the broader equity landscape, FVAL incorporates these mega-cap tech companies alongside innovators in other sectors like healthcare whenever their fundamental metrics justify inclusion.FVAL Portfolio Positioning TodayChatter abounds about the market broadening out as the tech sector concedes its dominance to other sectors. In this environment, where market breadth is expanding and simple cap-weighted momentum is waning, FVAL provides an option in the rotation to value. Meanwhile, it doesn’t sacrifice exposure to the structural growth drivers poised to shape the modern economy in years to come. For advisors and individual investors navigating the ongoing rotation, FVAL offers a disciplined vehicle to lock in value-factor exposure while maintaining equity upside. For more news, information, and analysis, visit the ETF Investing Content Hub. Fidelity Investments® is an independent company unaffiliated with VettaFi LLC (“VettaFi”). These articles do not form any kind of legal partnership, agency affiliation, or similar relationship between VettaFi and Fidelity Investments, nor is such a relationship created or implied by the articles herein. VettaFi LLC is the author and owner of these articles. 1282658.1.0

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