Quick Read
There are thousands of exchange-traded funds available in the market today. While having multiple options is great, it can also become difficult to choose the right one. If you are a beginner investor and do not have the knowledge of ETFs, it could feel overwhelming to pick one. There are ETFs designed for all types of investors, and they can fit any risk profile.
No matter your purpose of investment, there’s an ETF out there for you. Various financial institutions offer ETFs, but Fidelity remains one of the prominent industry players. It has played a huge role in the industry and is considered a highly reliable service provider. It offers several ETFs to choose from, but here are the top two worth buying this February.
Fidelity Blue Chip Growth ETF
An excellent fund by Fidelity, the Fidelity Blue Chip Growth ETF (FBCG) invests in large-cap companies. It aims to offer capital appreciation by investing in high-earning growth stocks that have a stable balance sheet. FBCG holds 184 stocks, and invests heavily in the tech sector, which has allowed it to rally. If you believe in the future of tech and artificial intelligence, this is the ETF to own.
It has an expense ratio of 0.61%. The fund allocates 49% to the information technology sector, 17% to the consumer discretionary industry, and 16% to the communication services sector. FBCG holds the Magnificent Seven in the top 10. These are Nvidia, Microsoft Corporation, Apple, Alphabet, and Meta Platforms. The top 10 holdings make up 62% of the portfolio. The fund generated an 18.36% average annual return in a year and 37.60% returns in 3 years.
If you’re worried about the market turmoil, you can sleep easier at night knowing that this ETF holds only the finest. The actively managed ETF offers a nice mix of long-term growth potential and invests in the best stocks across each industry. I think FBCG is a long-term buy and hold.
FBCG has gained 11.42% in the past year and is trading for $53.06. The surge in tech stocks could boost the ETF.
Fidelity Disruptive Technology ETF
The Fidelity Disruptive Technology ETF (FDTX) tracks the performance of the MSCI All Country World Information Technology Equal Weighted index. Launched in 2020, the fund has assets under management of $195 million. It invests in stocks of disruptive technology companies and aims to offer long-term capital growth. The fund has an expense ratio of 0.50%.
FDTX has generated an average annual return of 15.25% in a year and 30.57% in 3 years. The fund invests in only 45 stocks and allocates 25% to the semiconductor sector, followed by 17% to application software and 13.80% to systems software. Its top 10 holdings constitute 48% of the portfolio and include Taiwan Semiconductor, Nvidia, Microsoft Corporation, Palantir Technology, Meta Platforms, Amazon, Alphabet, and Micron Technology. These are tech disrupters that have a strong impact on the overall market.
Since the ETF is heavily focused on the tech sector, there’s some risk involved. However, it is a hot sector today, and could be rewarding in the long term. Fidelity has several other ETFs worth considering, but I think FDTX is a solid buy this month and will be driven by the ongoing earnings season. An investment of $10,000 in 2020 would be worth $22,830 today.
FDTX is exchanging hands for $38.08, and while it has remained flat in the past year, we could see an upside throughout 2026.
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