ETF Evaluator: Fidelity Hedged Equity ETF () Follow This ETF

Fidelity Hedged Equity ETF Overview

Fidelity Hedged Equity ETF (FHEQ) is an actively managed Nontraditional Equity Equity Hedged exchange-traded fund (ETF). Fidelity Investments launched the ETF in 2024.

The investment seeks capital appreciation. Normally investing at least 80% of assets in equity securities. Investing in equity securities of companies with market capitalizations generally similar to companies in the S&P 500® Index or Russell 1000 Index. Generally using computer-aided, quantitative analysis of historical valuation, growth, profitability, and other factors to select a broadly diversified group of stocks that may have the potential to provide a higher total return than that of the S&P 500® Index.

About Fidelity Hedged Equity ETF (FHEQ)

There are 5 members of the management team with an average tenure of 1.88 years: Anna Lester (2024), George Liu (2024), Shashi Naik (2024), Eric Granat (2024) and Anthony Italiano (2026). Management tenure is more important for actively managed ETFs than passive index ETFs.

The ETF has 2 primary benchmarks: S&P 500 (TR) index with a weighting of 100% and Cboe S&P 500 5% Put Protection TR USD index with a weighting of 100%. Fidelity Hedged Equity ETF has 196 securities in its portfolio. The top 10 holdings constitute 39.0% of the ETF’s assets. The ETF meets the SEC requirement of being classified as a diversified fund. The ETF is not considered to have an ESG focus with its investment selection and management.

Fidelity Hedged Equity ETF is part of the Equity global asset class and is within the Nontraditional Equity ETF group. Fidelity Hedged Equity ETF has 0.0% of its portfolio invested in foreign issues. The overall assets allocated to domestic stock is 98.6% There is 0.0% allocated to foreign stock, and 0.0% is allocated to preferred stocks. The bond allocation as a percentage of total assets is 0.0% (0.0% domestic bond, 0.0% foreign bond and 0.0% convertible bond). Fidelity Hedged Equity ETF has 1.3% of the portfolio in cash.

Assets Under Management

The fund has $928 million in total assets, which is above the $294 million average for the Equity Hedged category. Normally, lower assets under management translates to higher average expense ratios, and greater total assets are desired. However, for some investment categories, such as small-cap investing, it may be difficult for the manager to fully employ the desired active strategy if assets grow too large or too quickly.

FHEQ Performance and Fees

The expense ratio measures how much of a fund’s assets are used for administrative expenses and operating expenses, including adviser fees and fees for the transfer agent and custodial services. The Fidelity Hedged Equity ETF expense ratio is average compared to funds in the Equity Hedged category. Fidelity Hedged Equity ETF has an expense ratio of 0.48%, which is 37% lower than its category average, making the fund expense ratio grade a A. While it is difficult to predict returns, it is known that high annual expense ratios reduce your rate of return, and excessive fees are difficult to overcome. Active management normally comes with higher expense ratios than passive index management. Certain investment categories such as small company and foreign also normally have higher expense ratios. It is best to compare fund expense ratios against the category averages for meaningful assessments.

High portfolio turnover can translate to higher expenses and lower aftertax returns. Fidelity Hedged Equity ETF has a portfolio turnover rate of 86%, which indicates that it holds its assets around / 0.0 years. By way of comparison, the average portfolio turnover is 97% for the Equity Hedged category.

Recently, in the month of July 2026, Fidelity Hedged Equity ETF returned 1.2%, which earned it a grade of A, as the Equity Hedged category had an average return of -1.4%. The letter grades of A, B, C, D and F are based upon relative rankings within the investment category. A grade of A, for example, would indicate that the return is in the highest 20% for that time period compared to all ETFs in that category.

Fidelity Hedged Equity ETF has a trailing yield of 0.54%, which is below the 3.45% category average. The fund normally distributes its income quarterly and its capital gains annually.

It’s natural to seek the best-performing investments, but you must consider the relationship between risk and return and the impact of costs and taxes on your realized returns.

Fidelity Hedged Equity ETF Grades

Year to date, the ETF has returned 8.6%, 1.5 percentage points better than the category, which translates into a grade of B. The fund has returned 15.3% over the past year (grade of B).

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