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    • Fidelity All-in-One Equity ETF (FEQT) Review

    Fidelity All-in-One ETFs provide a convenient option for investors with varying risk profiles, offering a cost-effective way to diversify their portfolios across different asset classes. In this review, we’ll delve into the details of the Fidelity All-in-One Equity ETF (FEQT), including its holdings, fees, returns, advantages, disadvantages, and a comparison with the Fidelity All-in-One Growth ETF (FGRO).

    Introduction to FEQT:

    The Fidelity All-in-One Equity ETF is designed to achieve capital growth through total returns, utilizing a strategic asset allocation approach. It falls into the medium-risk category, which means that investors in FEQT can expect their portfolio to experience more volatility compared to the more conservative Fidelity All-in-One Balanced ETF (FBAL) or Fidelity All-in-One Conservative ETF (FCNS).

    Key Facts about FEQT as of June 30, 2023:

    • Inception Date: January 20, 2022.
    • Net Assets: $81.9 million.
    • Listing Exchange: NEO Exchange.
    • Eligible Accounts: FEQT can be held in non-registered and registered investment accounts like RRSPs, TFSAs, and RESPs. It’s also eligible for dividend reinvestment programs if supported by your brokerage platform.

    FEQT Asset Allocation:

    FEQT primarily invests in underlying Fidelity ETFs, with a small allocation to Fidelity Advantage Bitcoin ETF. It may also hold cash at various times. The fund aims to maintain a target asset mix of approximately 97% global equity securities and approximately 3% cryptocurrencies. The portfolio is rebalanced annually or when it deviates from this target allocation by more than 5%.
    As of June 30, 2023, FEQT held the following underlying ETFs:
    FEQT ETF HoldingsAllocation
    Fidelity U.S. High Quality Index ETF12.6%
    Fidelity U.S. Value Index ETF12.4%
    Fidelity U.S. Momentum Index ETF12.2%
    Fidelity U.S. Low Volatility Index ETF11.8%
    Fidelity International Momentum Index ETF6.1%
    Fidelity International Low Volatility Index ETF5.9%
    Fidelity International Value Index ETF5.9%
    Fidelity International High Quality Index ETF5.8%
    Fidelity Canadian Momentum Index ETF5.9%
    Fidelity Canadian High Quality Index ETF5.9%
    Fidelity Canadian Value Index ETF5.8%
    Fidelity Canadian Low Volatility Index ETF5.8%
    Fidelity Advantage Bitcoin ETF3.9%
    FEQT offers exposure to U.S., Canadian, and international equities, as well as Bitcoin. The geographical diversification as of May 31, 2023, is as follows:
    • United States: 53%
    • Canada: 22.7%
    • Japan: 5.9%
    • United Kingdom: 4.3%
    • Switzerland: 2.5%
    • Australia: 1.6%
    • Germany: 1.4%

    The fund’s holdings are also diversified across various industry sectors as of May 31, 2023:

    • Financials: 18.3%
    • Information Technology: 13.9%
    • Industrials: 11.9%
    • Consumer Discretionary: 10.4%
    • Energy: 9%
    • Materials: 8.5%
    • Healthcare: 7%
    • Consumer Staples: 6.7%
    • Utilities: 4.4%
    • Real Estate: 3.1%
    • Communication Services: 2.5%
    • Multi-Sector: 0.5%

    FEQT Returns:

    Using its net asset value (NAV), FEQT has delivered a year-to-date return of 11.47% and a one-year return of 14.47% as of July 31, 2023. Since its inception, it has returned 4.16%.

    FEQT Fees:

    As of March 31, 2023, FEQT had a Management Expense Ratio (MER) of 0.43%. If you invest $10,000 in FEQT, your annual fee would be approximately $43.

    Benefits of Fidelity All-in-One ETFs

    Fidelity All-in-One ETFs offer several advantages, including:

    • Easy geographic and sector diversification compared to selecting individual stocks and bonds.
    • Simplified portfolio management, saving time on researching multiple assets.
    • Automatic rebalancing to maintain the target allocation.
    • Eligibility for both registered and non-registered accounts.
    • Liquidity for easy buying and selling throughout the trading day.
    • Lower expense ratios compared to traditional mutual funds.
    • Professional management by a reputable investment firm.

    Cons of FEQT:

    While Fidelity All-in-One ETFs offer simplicity, they come with some limitations:

    • Pre-determined target asset allocation, limiting customization.
    • Exposure to cryptocurrencies (Bitcoin) may not be suitable for all investors.
    • Mainly comprises equity securities, suitable for long-term investors comfortable with equity market volatility.

    FEQT vs. FGRO:

    FGRO has a lower target weighting for equity stocks (82% vs. 97%) and includes approximately 15% fixed-income assets. It also has exposure to investment-grade bonds.

    Its top-15 ETF holdings as of June 30, 2023, include various Fidelity ETFs across different asset classes.

    FGRO shares a “medium” risk rating with FEQT, and as of March 31, 2023, its MER was 0.42%.

    Conclusion:

    FEQT offers a convenient solution for self-directed investors looking to simplify their portfolios. Instead of managing multiple ETFs themselves, investors can benefit from built-in strategic asset allocation and consistent rebalancing. While FEQT may not suit those seeking extensive customization or avoiding cryptocurrencies, it provides a cost-effective and diversified investment option for long-term investors.
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