Explore Research Firms

Analyst ratings and reports are generated by independent third-party research firms to help investors better understand the potential risks and opportunities of investing in a particular ETF/ETP. Each research firm has a different approach to evaluating ETFs/ETPs. For example, one firm�s ratings may be based on the underlying securities in the ETP, while another�s may be primarily based on the structural integrity of the ETF/ETP. Click on the Research Firm to learn more about its methodology, investment style, approach and content available on Fidelity.com for Exchange Traded Products

Research Firm	Methodology	Approach	Investment Style	ETF Research Provided
FactSet	Analyst Driven, Quantitative Model Driven	Fundamental Analysis, Structural Analysis	Bottoms Up	Ratings, Reports and Data
Morningstar	Analyst Driven, Quantitative Model Driven	Fundamental Analysis	Bottoms Up	Ratings, Reports, Expert Strategies and Data
Recognia	Chart Pattern Recognition	Technical Analysis	n/a	Chart Pattern Recognition
Trading Central	Analyst Driven, Quantitative Model Driven	Technical Analysis	n/a	Ratings and ISS-EVA

Print All

About Methodology

Analyst-Driven Methodology
Quantitative Model-Driven Methodology
Other Methodologies
How to Choose

Analyst-Driven Methodology

Firms that take an analyst-driven approach have experts review market conditions and data as well as company information to create a recommendation. Typically, research firms have an approach or model that they use as a starting point for analysis to ensure a degree of consistency across multiple analysts.

The advantage of following a firm that has analyst-driven research is in the flexibility and insight that an individual can bring to the analysis. Critical market news or other developments that might be important to the future price of a stock generally won't be included in pure quantitative models. For example, consider a pharmaceutical company that has a critical drug review pending with the FDA. An analyst would typically review and discuss the potential impact of that upcoming drug and include that analysis in making a recommendation. Finally, another reason people use analyst-driven research is for the quality of the writing and insight that only a person can really bring to this work.

Quantitative Model-Driven Methodology

Firms that take a model-driven approach use quantitative models that process company financial data and market information (stock price and volume) to drive recommendations. Models are generally built and fine-tuned over a period of many years through a rigorous analytic process. Quantitative models are not subject to influence or interference from outside sources, so they are objective in that respect. They impose discipline and consistency on the research firm.

Because much of the analytical work is performed by computers, these firms are often able to cover a broader range of stocks, as well as update their recommendations more frequently based on company financial changes or market changes. There are many types of models in use by firms that may generate differing recommendations.

Other Methodologies

A few firms provide specialized analysis that can help you in researching stocks, including:

Earnings Consensus & Analysis, which collects current and historical earnings estimates and compares them to actual results.
Recommendations Accuracy Analysis, which offers quantitative analysis of the quality of firms' stock recommendations.
Research Firm Performance Analysis, which ranks research firms by historical performance.
Stock recommendation analysis, which evaluates the theoretical performance of research firms' buy, sell, or hold ratings.
Stock chart pattern recognition, which evaluates chart and indicator patterns in the context of technical analysis.

Often, this type of research is used to complement or support other, more typical types of research.

How to Choose

As you think about which research firms to use, keep these three things in mind:

Review the firm score cards to see how well the firm's research ratings have performed in the past.
Look for a firm whose approach is consistent with your approach to investing. If you are an investor who prefers to own value stocks, then look for a research provider that stresses a value equity style.
Be sure to read sample reports from the firms whose research you're considering to ensure they provide you the information and insight that you are looking for.

Keep in mind that you may also want to combine research methodologies. For example, you may want to follow the recommendations of a quantitative firm, read the reports from an analyst-driven firm, and complement that with insight from a supporting research firm.

Learn more about analyst vs. model research (PDF)

PDFs require Adobe® Reader®.

Print All

About Analysis Approach

Fundamental Analysis
Technical Analysis
Environmental, Social & Governance (ESG)
How To Choose

Fundamental Analysis

Fundamental analysis focuses on understanding the core value of a business. The first step in fundamental analysis is typically the analysis of a company's financial statements. Fundamental analysis also involves analyzing many other areas of a business such as the quality of the company's marketing or brand, its distribution network, the value added by its products, the firm's strategy, its operational capabilities, and the firm's competitors.

Technical Analysis

Technical analysis focuses on market action – specifically, volume and price. Technical analysis assumes that the market has already taken into account the fundamentals of a company, and it is only investors' buying and selling decisions that drive future stock price movements. There are many different technical analysis tools that are used, including indicators, trend lines, and chart patterns. All of these different tools, however, are based on analysis of volume and price.

Environmental, Social & Governance (ESG)

This analysis focuses on understanding a firm's impact in non-financial terms. Environmental analysis focuses on understanding a firm's physical impact on the world around it. Social measures look at how a firm treats its employees and interacts with the surrounding community. Finally, governance looks at how a firm manages itself - how it pays its officers, interacts with its shareholders, etc.

How to Choose

When considering what stocks to buy or sell, you'll need to use the approach that you're most comfortable with. There are many people who believe fundamental analysis is the only way to go in researching stock; others believe that it's investors' decisions based on the technical analysis (i.e., buying and selling patterns), that really matter. Still others adopt a blend, using fundamental analysis to determine what stocks they want to buy and then technical analysis to help them decide when to buy the stock.

Learn more about fundamental vs. technical research (PDF)

PDFs require Adobe® Reader®.

Print All

About Equity Style

Growth
Value
How To Choose

Growth

A research firm that adheres to a growth style believes that growth prospects or growth history is the most important factor in valuing a company. They may look at revenue growth, profit growth, or margin growth, but they all try to identify stocks worth owning based on growth that is not being recognized in a company's stock price.

Value

A research firm that adheres to a value style tries to buy companies whose assets are underpriced. Those assets may be physical assets, like equipment and real estate or streams of revenue and profits from customers. They may also include intangibles such as brand or reputation. Value investing is often associated with Graham and Dodd, and their book Security Analysis.

How to Choose

While investors may be comfortable with a growth or a value approach to investing, it's also important to look at the markets and see whether value or growth stocks are being favored. During periods when growth stocks are leading, you may see the performance of value–oriented research firms lag. Conversely, when value stocks are leading, growth–oriented research firms' performance may lag. Also, in certain industries or sectors, one of the approaches may be more typically used. Or conversely, when value stocks are leading, growth-oriented research firms' performance may lag. Also, in certain industries or sectors, one approach or the other may be more typically used.

Learn more about growth vs. value research (PDF)

PDFs require Adobe® Reader®.