Fidelity Low Volatility Factor ETF (FDLO) Covered Calls

The Fidelity Low Volatility Factor ETF (FDLO) is a passively managed fund that provides exposure to U.S. large- and mid-cap companies identified as having lower price volatility than the broader market. By tracking the Fidelity U.S. Low Volatility Factor Index, the fund seeks to offer investors a smoother equity experience, potentially reducing drawdowns during market turbulence while maintaining participation in the U.S. equity market.

You can sell covered calls on Fidelity Low Volatility Factor ETF to lower risk and earn monthly income. Born To Sell's covered call screener gives you customized search capabilities across all possible covered calls but here are a couple of examples for FDLO (prices last updated Thu 11:05 AM ET):

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The Fidelity Low Volatility Factor ETF (FDLO) offers a rules-based approach to equity investing, specifically targeting stocks that exhibit lower historical price fluctuations compared to the broader market. By focusing on the "low volatility" factor, the fund aims to provide risk-conscious investors with a portfolio that may offer more stable returns and lower drawdowns during periods of market stress, making it a common "defensive" overlay for a core equity allocation.

The fund’s methodology systematically screens large- and mid-cap U.S. equities to construct a diversified portfolio. While it maintains a broad sector profile similar to the Russell 1000, its weighting is tilted toward companies with steady earnings and lower beta. FDLO provides the liquidity and transparency of an ETF, allowing investors to adjust their volatility exposure without abandoning equity market participation entirely.

Competitive Landscape

FDLO operates in a highly competitive segment of factor-based investing. It competes for capital against established, highly liquid, and deeply optionable "min-vol" benchmarks, most notably the iShares MSCI USA Min Vol Factor ETF (USMV) and the Invesco S&P 500 Low Volatility ETF (SPLV). These competitors are industry standards for institutional and retail investors alike.

While USMV and SPLV dominate the AUM and options-volume space, FDLO remains a strong competitor by leveraging Fidelity’s platform efficiency and competitive expense ratio. It is frequently chosen by investors who are already within the Fidelity ecosystem or those who prefer its specific index construction methodology over the broader-market approach of its larger rivals.

Strategic Outlook and Innovation

The strategic outlook for FDLO is anchored in the persistent nature of the low-volatility factor, which has historically provided defensive benefits during market downturns. As market environments shift, FDLO provides a reliable, transparent tool for rebalancing portfolios toward risk-mitigation. The management team remains focused on minimizing tracking error and maintaining the fund’s low-cost structure, ensuring it remains an efficient vehicle for investors.

Innovation at the fund level is driven by Fidelity’s quantitative research, which continuously refines the rules-based index to balance volatility reduction with diversification. By providing this factor-tilted exposure in a liquid ETF wrapper, Fidelity ensures that FDLO remains a foundational element for investors looking to balance growth potential with disciplined risk management in their U.S. equity sleeves.

Want more examples? FDL Covered Calls | FDMO Covered Calls