FQAL vs FTCE

FQALAFidelity Quality Factor ETF

FTCECFirst Trust New Constructs Core Earnings Leaders ETF

In short

FQAL Fidelity's own quality screen, boxed into an ETF: roughly 130 U.S. companies picked for profitability, steady cash flow and clean balance sheets, at 0.15% a year, well under the typical fee in the quality-factor group.

FTCE Quality investing with a forensic-accounting accent. FTCE tracks a Bloomberg index built on New Constructs core earnings work, holding about 100 US companies. A 2024 launch that charges 0.60% in a category full of cheaper giants.

Stated mandate

FQAL The fund prioritizes U.S. companies exhibiting higher profitability, stable cash flows, and strong balance sheets.

FTCE The Fund seeks to track the price and yield performance of the Bloomberg New Constructs Core Earnings Leaders Index before fees and expenses.

Why people hold it

• FQAL Costs 0.15% a year, roughly half the typical fee among quality-factor ETFs. That puts it in the cheapest tier of the group, alongside JQUA, VFQY and QUAL.
• The rulebook is Fidelity's own: the Fidelity U.S. Quality Factor Index, tracked tightly. One of the closer index implementations in its peer group.
• Live since 2016 and now a multi-billion-dollar fund, so this is a settled product rather than a launch still finding its footing.
• The screen is explicit about what it wants: higher profitability, stable cash flows, strong balance sheets. No vague 'quality' hand-waving.

• FTCE A screen no other fund in the US quality group runs: the Bloomberg New Constructs Core Earnings Leaders Index, profitability-driven and rules-based rather than a repackaged cap-weighted quality score.ftportfolios.com
• The mandate is plain on the tin: US stocks, quality and profitability screens, index tracking, no manager improvising between rebalances.ftportfolios.com
• Concentrated by design: roughly 100 names, tight enough for the screen to show up in results. Distributions come quarterly.

Worth knowing

• FQAL Roughly 130 stocks, not the whole market. A narrower bench means individual names and sector tilts carry more weight than in a total-market fund.
• Trading volume is light next to the category's biggest quality funds, which can show up as wider bid-ask spreads.
• Distributions come quarterly, but the screen hunts profitability and balance-sheet strength, not yield.

• FTCE The fee is the headline trade-off: 0.60% a year, against a category median near 0.29% and the big quality names at 0.12% (JQUA) or 0.15% (QUAL).
• Thinly traded compared with the household-name quality funds, so spreads can be wider and large orders take more care at the open and close.
• Launched in 2024, so the record is short. There is not yet a full market cycle showing how the core earnings screen behaves when leadership shifts.

Full FQAL profile⁠

Full FTCE profile⁠