A Broadening Market Boosts the Case for Quality ETF Investing

2026 has kicked off with investors on the lookout for opportunities in a broadening market. While tech remains an important part of countless investor portfolios, it’s not the only category offering opportunities. Of course, then, the question for investors is which areas are worth watching? A quality ETF view can help investors gain exposure to sectors and stocks poised for a strong year.

See more: Fidelity ETF Leader Craig Ebeling Breaks Down 2025 ETF Market Data

FQAL, the Fidelity Quality Factor ETF, offers a great route into that potential for market broadening. The quality ETF charges a 15-basis-point (bps) fee to track the Fidelity U.S. Quality Factor Index. The proprietary index invests in U.S. stocks based on metrics like balance sheets, cash flows, and profitability.

That has helped FQAL produce solid returns over the last year, even amid that big focus on tech. The quality ETF returned 15.5% over the last year, according to ETF Database data as of February 10th. That outperformed the fund’s ETF Database Category average, falling into the large-cap growth equities category, in that one-year period.

While the strategy does have some exposure to big tech names, it also invests in other companies that meet its quality standards. JPMorgan & Chase Co. (JPM) and Eli Lilly (LLY) both sit among its larger-weighted stocks, for example.

JPM has returned 18.8% over the last year as of February 10th. LLY, meanwhile, continues to stand out for its focus on key drugs across areas such as diabetes treatment, weight loss, sleep apnea, and more. FQAL has returned 18.5% over the last one year as of February 10th, itself.

What outlook, then, is there for a broadening approach? On the one hand, some of that instinct to broaden is driven by diversifying away from the risk of tech concentration. On the other hand, areas like biotech, natural resources, and energy can benefit from falling interest rates and rapidly rising energy demand. For those who believe in the case for broadening markets this year, but aren’t sure where to look, quality ETF FQAL may provide a place to start.

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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.

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