Bringing Quantitative Research to Global Equities

Fidelity has introduced a quantitative approach to global equity investing with the launch of the Fidelity Global Quant Equity ETF (FGQE), an actively managed strategy that evaluates more than 2,400 companies daily using over 40 proprietary investment signals.

Analysing thousands of companies consistently presents a significant research challenge.

While traditional fundamental analysis typically examines a smaller selection of businesses in depth, FGQE uses quantitative methods to evaluate a broad investment universe through a repeatable research framework.

How the Model Evaluates 2,400+ Companies

FGQE's proprietary quantitative model assesses over 2,400 mid- and large-cap companies within the MSCI All Country World Index (ACWI) universe, scoring each company daily using over 40 investment signals grouped into six categories:

• Value: Identifies stocks that may be attractively priced relative to their fundamentals, using measures such as free cash flow yield.
• Quality: Evaluates financial strength and business health, including return on equity.
• Growth: Assesses historical and potential future growth, including indicators such as patent growth.
• Momentum: Measures relative strength in stock prices and business fundamentals.
• Industry insight: Examines industry attractiveness and its implications for individual companies.
• Non-traditional data: Incorporates information beyond conventional financial statements, including natural language processing of earnings-call transcripts.

Rather than relying on a single characteristic, the model evaluates companies across several dimensions simultaneously.

According to Fidelity, applying consistent criteria across the investment universe can help reduce the influence of short-term market sentiment and behavioural biases.

The firm distinguishes FGQE from conventional factor and smart beta strategies through the breadth of its proprietary signals, daily stock evaluation and actively managed portfolio construction.

A Model That Continues to Evolve

FGQE's model is not static. Fidelity designed its quantitative process to develop over time, with continuous research and innovation driving regular enhancements as markets evolve and new insights emerge.

The ETF is managed by CFA charterholders Anna Lester, George Liu and Shashi Naik, whose work centres on refining the model. As new signals are discovered, the team evaluates and incorporates them, adjusting signals, parameters and portfolio construction methodologies so that the investment process reflects the latest research.

This development spans the full research cycle: designing proprietary signals with advanced techniques, broadening the signal set through alternative data, and improving how signals are combined. Analysis of how the portfolio is implemented also feeds back into ongoing model development.

The model, in turn, carries much of the portfolio discipline. It promotes diversification across companies, sectors and regions and considers company-specific risks and trading opportunities in implementation, while a custom risk model monitors factor exposures and overall portfolio risk.

As Fidelity explains in its whitepaper on systematic investing, the objective is not to replace human expertise with algorithms, but to combine the consistency of quantitative research with professional oversight.

The Research Infrastructure Behind FGQE

FGQE is supported by Fidelity's Quantitative Research & Investments (QRI) platform, bringing together more than 200 quantitative investment professionals and over 270 technologists across Fidelity Investments.

Fidelity's quantitative investing experience spans more than 60 years, dating back to its first quantitative hire in 1965. Its research capabilities draw on more than 30 years of historical model data and over 100 alternative data sources.

The portfolio management team also oversees more than US$50 billion in assets as of August 31, 2026.

These resources support the development and refinement of investment signals, risk modelling and portfolio implementation, allowing Fidelity to apply a consistent research process across thousands of securities.

Where FGQE Fits in a Global Portfolio

Fidelity positions FGQE as a cost-effective, actively managed solution for investors seeking diversified global equity exposure through a single holding.

With a management fee of 0.55%, the strategy combines quantitative stock selection with professional portfolio oversight.

Its portfolio construction process considers the country and sector composition of the MSCI ACWI, seeking broad global market exposure while pursuing excess returns through active stock selection.

Unlike a passive index ETF, FGQE does not simply replicate its benchmark.

Its holdings and performance may differ from the index as a result of its active investment process.

As with any actively managed quantitative strategy, investors should consider risks including higher portfolio turnover, tracking error, data limitations and model assumptions. Further details are available in the fund's prospectus.

For more information about the investment strategy, visit the FGQE fund page.

Source: Fidelity Investments Canada, How Systematic Investing Can Help Broaden Opportunity: Fidelity Global Quant Equity ETF, September 2026.

Important Information

Read a fund's prospectus before investing. Commissions, trailing commissions, management fees, brokerage fees and expenses may be associated with investments in mutual funds and ETFs. Mutual funds and ETFs are not guaranteed. Their values change frequently, and investors may experience a gain or a loss. Past performance may not be repeated.

Fidelity Global Quant Equity ETF is an actively managed ETF that invests in global equities using a proprietary quantitative multi-factor model. The ETF’s active management approach may result in higher portfolio turnover and tracking error relative to broad market indices. The ETF uses a quantitative model which may not produce the intended results for a variety of reasons, including, but not limited to: errors or omissions in the data used by the model, the factors and/or assumptions used in the model, the weight placed on each factor and/or assumption in the model, changing sources of market return or market risk, market disruption, and technical issues in the design, development, implementation, and maintenance of the model. Please read the ETF's prospectus for more details of these and other risks.

This article is part of an advertising partnership between Fidelity Investments Canada and ETF Market Canada.

This article is for information purposes only and does not constitute investment advice. Investors should seek advice from a registered financial professional before making investment decisions.