(FDHY) Fidelity High Yield Factor - Ratings and Ratios

The Fidelity® High Yield Factor ETF (NYSE ARCA: FDHY) is designed to provide exposure to high-yield debt securities, commonly referred to as junk bonds. The fund typically allocates at least 80% of its assets to securities rated below investment grade, focusing on issuers with lower credit quality but higher potential yields. The advisor employs the ICE® BofA® BB-B US High Yield Constrained Index as a benchmark for portfolio construction, emphasizing credit quality distribution and risk management. The fund primarily holds securities rated BB or B by S&P, Ba or B by Moodys, or equivalently rated by other recognized credit agencies. Unrated securities are included only if FMR, the funds advisor, deems them comparable in quality to rated issues.

FDHY is structured to capture the performance of higher-yield debt instruments while maintaining a focus on risk-adjusted returns. The funds holdings are selected based on their alignment with the defined credit characteristics of the benchmark index, ensuring a balanced exposure across the high-yield spectrum. This approach aims to mitigate risk while capitalizing on the potentially higher returns associated with below-investment-grade debt.

Based on technical and fundamental analysis, FDHY is expected to maintain its current trajectory over the next three months. The funds average volume of 51,316 shares suggests moderate liquidity, while its last price of $48.78 indicates stability near its 20-day SMA of $48.79. The 50-day SMA at $48.43 and 200-day SMA at $47.46 signal a slight upward trend, supported by an ATR of 0.29, which reflects low volatility. Fundamentally, with AUM of $370.71 million, FDHY is well-positioned to navigate market conditions, particularly as investors seek higher yields in a low-interest-rate environment. The funds focus on BB-B rated securities may attract demand, potentially supporting its price over the forecast period.