Low-volatility investing focuses on providing returns similar to the broader market over time with less volatility — a smoother ride. Stocks with stable revenues and earnings are also less susceptible to recessions and other macroeconomic events. Low-volatility stocks tend to hold up better when markets decline rapidly, but they may lag during strong market rallies.
 

What is a low-volatility factor?

The low volatility factor targets securities with lower risk than the broader market, as well as stable earnings. They have historically produced higher risk-adjusted returns over time.

  • Typically defined as price volatility
  • Common ways to measure volatility is to screen for stocks based on the historical volatility of their prices and earnings

Why does it matter?

Investors seek returns similar to those of the market over time, but desire more consistency, making low volatility a compelling factor

During market declines, low-volatility portfolios tend to experience smaller drawdowns, providing the benefit of compounding positive excess returns

The benefits of the lower-volatility approach can also be achieved by investing in companies with more stable fundamentals, which are less susceptible to declines during recessions and other macroeconomic events

 

Fidelity Canada Low Volatility ETFs

Fidelity Canadian Low Volatility ETF

Ticker symbol
FCCL

Learn more →

Fidelity U.S. Low Volatility ETF

Ticker symbol
FCUL

Learn more →

Fidelity U.S. Low Volatility ETF - US$

Ticker symbol
FCUL.U

Learn more →

Fidelity International Low Volatility ETF

Ticker symbol
FCIL

Learn more →

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

Fidelity for low volatility factor-based investment strategy

At Fidelity, our low volatility factor funds seek to track the performance of tailor-made indexes that are actively designed. The Fidelity Canada Low Volatility Factor Index is designed to reflect the performance of stocks with lower volatility than the broader market. Typically, securities with lower risk than the broader market have historically produced higher risk-adjusted returns.

Single-factor exposure to companies with lower volatility than the broader equity market

An outcome-oriented approach that seeks to provide market-like returns with lower volatility

An efficient complement to a well-diversified portfolio

 

ETF education centre

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

 

Visit the education centre


How to buy Fidelity ETFs

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

Get started today