This article is sponsored by Fidelity Investments Canada ULC. All opinions are mine.
Fidelity All-in-One ETFs cater to investors with differing risk profiles, making it easy to save on fees while diversifying your portfolio across asset classes.
For medium investment risk levels, you can utilize the Fidelity All-in-One Equity ETF (FEQT) or Fidelity All-in-One Growth ETF (FGRO).
If you are a conservative or balanced investor aiming to build a low to medium risk investment portfolio, the Fidelity All-in-One Balanced ETF (FBAL) or Fidelity All-in-One Conservative ETF (FCNS) may be to your taste.
This FEQT review covers its holdings, fees, returns, pros, cons, and how it compares to FGRO.
What is FEQT?
The Fidelity All-in-One Equity ETF aims to achieve capital growth through total returns by using a strategic asset allocation approach.
FEQT has a medium risk rating. Investors holding FEQT can expect their portfolio to experience more volatility than FBAL or FCNS.
Key facts for this ETF as of June 30, 2023, include:*
- Inception date: January 20, 2022.
- Net assets: $81.9 million.
- Listing Exchange: NEO Exchange
- Eligible accounts: like FBAL, FGRO, and FCNS, FEQT can be held in non-registered and registered investment accounts like RRSPs, TFSAs, and RESPs.
It is also eligible for dividend reinvestment programs if supported by your brokerage platform.
FEQT Asset Allocation
FEQT invests primarily in underlying Fidelity ETFs, with a small allocation to Fidelity Advantage Bitcoin ETF. It may also hold some cash at any point in time.
In general, it aims to maintain a target asset mix of approximately 97% global equity securities and approximately 3% cryptocurrencies. The portfolio is rebalanced annually, as well as when the portfolio deviates from this target asset allocation by more than 5%.
As of June 30, 2023, FEQT held the following underlying ETFs:*
| FEQT ETF Holdings | Allocation |
| Fidelity U.S. High Quality Index ETF | 12.6% |
| Fidelity U.S. Value Index ETF | 12.4% |
| Fidelity U.S. Momentum Index ETF | 12.2% |
| Fidelity U.S. Low Volatility Index ETF | 11.8% |
| Fidelity International Momentum Index ETF | 6.1% |
| Fidelity International Low Volatility Index ETF | 5.9% |
| Fidelity International Value Index ETF | 5.9% |
| Fidelity International High Quality Index ETF | 5.8% |
| Fidelity Canadian Momentum Index ETF | 5.9% |
| Fidelity Canadian High Quality Index ETF | 5.9% |
| Fidelity Canadian Value Index ETF | 5.8% |
| Fidelity Canadian Low Volatility Index ETF | 5.8% |
| Fidelity Advantage Bitcoin ETF | 3.9% |
As shown in the table above, the fund invests in underlying ETFs that offer exposure to U.S., Canadian, and international equities, plus Bitcoin.
You can get a better sense of the geographical diversification this fund offers by looking at the country mix as of May 31, 2023:*
- 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 broadly diversified across industry sectors as follows (as of May 31, 2023):*
| Sectors | Allocation |
| 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 returned 11.47% year-to-date and 14.47% over the last 1 year. Since its inception, it has returned 4.16%. This performance data is as of July 31, 2023.*
FEQT Fees
The Fidelity All-in-One Equity ETF had an MER of 0.43% as of March 31, 2023.*
If you invest $10,000 in FEQT, your annual fee is approximately $43.
Benefits of Fidelity All-in-One ETFs
Fidelity All-in-One ETFs offer many benefits, including:
- It is easier to achieve geographic and sector diversification compared to buying individual stocks and bonds.
- They are easy to manage, and you save time on researching multiple assets to design your portfolio.
- They are automatically rebalanced when needed to maintain the target allocation.
- You can hold Fidelity All-in-One ETFs in registered or non-registered accounts.
- They are liquid and easy to buy and sell throughout the trading day, unlike mutual funds, which can only be traded at the end of a trading day.
- You pay lower expense ratios compared to traditional mutual funds.
- Fidelity All-in-One ETFs are managed by professionals, and they are offered by a reputable investment firm.
Cons of FEQT
FEQT has a pre-determined target asset allocation, so you can’t tweak their holdings like you can by selecting individual securities on your own. That said, you can pick a Fidelity All-in-One ETF that closely matches your risk tolerance.
If you want to completely avoid having exposure to alternative assets like Bitcoin, this fund may not be suitable for you. However, this small allocation to cryptocurrencies could provide additional diversification benefits and offer the potential for improved long-term risk-adjusted returns.
Lastly, FEQT mainly comprises exposure to equity securities, and is designed for the long-term investor who can handle the volatility of returns generally associated with equity investments.
FEQT vs. FGRO
FGRO has a lower target weighting for equity stocks (82% vs 97%) and includes approximately 15% fixed-income assets.
Like FEQT, it holds underlying ETFs with exposure to a mix of U.S., Canadian, and international stocks across multiple sectors.
Unlike FEQT, FGRO also has exposure to investment-grade bonds.
Its top-15 ETF holdings as of June 30, 2023, are:*
| FGRO ETF Holding | Allocation |
| Fidelity U.S. High Quality Index ETF | 10.8% |
| Fidelity U.S. Value Index ETF | 10.4% |
| Fidelity U.S. Momentum Index ETF | 10.4% |
| Fidelity U.S. Low Volatility Index ETF | 10.1% |
| Fidelity International Momentum Index ETF | 5.2% |
| Fidelity International High Quality Index ETF | 5.1% |
| Fidelity International Low Volatility Index ETF | 5.0% |
| Fidelity International Value Index ETF | 5.0% |
| Fidelity Canadian Value Index ETF | 5.2% |
| Fidelity Canadian Momentum Index ETF | 5.1% |
| Fidelity Canadian Low Volatility Index ETF | 4.9% |
| Fidelity Canadian High Quality Index ETF | 4.9% |
| Fidelity Systematic Canadian Bond Index ETF | 10.6% |
| Fidelity Global Core Plus Bond ETF | 3.5% |
| Fidelity Advantage Bitcoin ETF | 3.8% |
Like FEQT, FGRO has a “medium” risk rating. Its MER was 0.42% as of March 31, 2023.
Learn more about FGRO in this review or visit Fidelity’s website.
Conclusion
An all-in-one ETF solution like FEQT can help simplify your investing as a self-directed investor.
I used to design my portfolios using multiple ETFs. However, rebalancing them myself 2-3 times annually used to be a pain. Instead of worrying about selecting tens or hundreds of individual assets and rebalancing them manually, FEQT offers a lower-cost solution designed with built-in strategic asset allocation and consistent portfolio rebalancing.
Another plus is that you can trade ETFs commission-free on some brokerage platforms.
*Source: Fidelity Investments Canada ULC
Commissions, trailing commissions, management fees, brokerage fees and expenses may be associated with investments in ETFs. Fidelity’s All-in-One ETFs pay indirect management fees through their investments in underlying Fidelity ETFs that pay management fees and incur trading expenses (in addition to the indirect management fee, the Fidelity ETFs will also pay indirectly the operating expenses of the underlying Fidelity ETFs). Please read the ETF’s prospectus, which contains detailed investment information, before investing. The indicated rates of return are historical annual compounded total returns for the period indicated including changes in unit value and reinvestment of distributions. The indicated rates of return do not take into account sales, redemption, distribution or option charges or income taxes payable by any unitholder that would have reduced returns. ETFs are not guaranteed. Their values change frequently, and investors may experience a gain or a loss. Past performance may not be repeated.
The management fees directly payable by Fidelity All-in-One ETFs are nil. The ETFs invest in underlying Fidelity ETFs that charge a direct management fee, and as a result, pay an indirect management fee. Based on the management fees and the anticipated weightings of the underlying Fidelity ETFs, it is expected that the effective, indirect management fee for Fidelity All-in-One Conservative ETF will be approximately 0.34%, Fidelity All-in-One Balanced ETF 0.35%, Fidelity All-in-One Growth ETF 0.37%, and Fidelity All-in-One Equity ETF 0.38%. Actual indirect management fees will be reflected in the management expense ratio in addition to applicable taxes, fixed administration fees, trailing commissions, portfolio transaction costs and expenses, as applicable, of each ETF/Fund, posted semi-annually.
Each of the Fidelity All-in-One ETFs has a neutral mix, which includes a small allocation to Fidelity Advantage Bitcoin ETF™ ranging between 1% and 3%. If each portfolio deviates from its neutral mix by greater than 5% between annual rebalances, it will also be rebalanced. Such rebalancing activity may not occur immediately upon crossing that threshold but will occur shortly thereafter.
The investment risk level indicated is required to be determined in accordance with the Canadian Securities Administrators standardized risk classification methodology, which is based on the historical volatility of a fund, as measured by the ten-year annualized standard deviation of the returns of a fund or those of a reference index, in the case of a new fund.
A fund’s volatility is determined using a statistical measure called “standard deviation.” Standard deviation is a statistical measure of how much a return varies over an extended period of time. The more variable the returns, the larger the standard deviation. Investors may examine historical standard deviation in conjunction with historical returns to decide whether an investment’s volatility would have been acceptable given the returns it would have produced. A higher standard deviation indicates a wider dispersion of past returns and thus greater historical volatility. Standard deviation does not indicate how an investment actually performed, but it does indicate the volatility of its returns over time. Standard deviation is annualized. The returns used for this calculation are not load-adjusted. Standard deviation does not predict the future volatility of a fund.
The statements contained herein are based on information believed to be reliable and are provided for information purposes only. Where such information is based in whole or in part on information provided by third parties, we cannot guarantee that it is accurate, complete or current at all times. It does not provide investment, tax or legal advice, and is not an offer or solicitation to buy. Particular investment strategies should be evaluated according to an investor’s investment objectives and tolerance for risk. Fidelity Investments Canada ULC and its affiliates and related entities are not liable for any errors or omissions in the information or for any loss or damage suffered.
Certain statements in this commentary may contain forward-looking statements (“FLS”) that are predictive in nature and may include words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “estimates” and similar forward-looking expressions or negative versions thereof. FLS are based on current expectations and projections about future general economic, political and relevant market factors, such as interest, and assuming no changes to applicable tax or other laws or government regulation. Expectations and projections about future events are inherently subject to, among other things, risks and uncertainties, some of which may be unforeseeable and, accordingly, may prove to be incorrect at a future date. FLS are not guarantees of future performance, and actual events could differ materially from those expressed or implied in any FLS. A number of important factors can contribute to these digressions, including, but not limited to, general economic, political and market factors in North America and internationally, interest and foreign exchange rates, global equity and capital markets, business competition and catastrophic events. You should avoid placing any undue reliance on FLS. Further, there is no specific intention of updating any FLS, whether as a result of new information, future events or otherwise.
