Low volatility exchange traded funds (ETFs) were the talk of the ETF universe for a significant portion of 2016, but judging by recent outflows from some of these funds, investors currently are not overly enthusiastic on the low volatility factor.

Enthusiasm or not, some low volatility ETFs continue delivering solid returns and that includes some of the newer members of the group, such as the Fidelity Low Volatility Factor ETF (FDLO). FDLO debuted in September as part of a broader group of smart beta offerings from Fidelity, so the ETF is not old, but it was one of about 120 to ascend to record highs on Monday.

FDLO tracks the Fidelity U.S. Low Volatility Factor Index, "which is designed to reflect the performance of stocks of large and mid-capitalization U.S. companies with lower volatility than the broader market," according to Fidelity.

A deeper look at FDLO reveals this is not what many are used to when it comes to low volatility ETFs, but that is not a bad thing. For example, FDLO's largest sector weight is an almost 21.4% allocation to the technology sector, making FDLO the only U.S.-focused ETF dedicated to the low volatility factor that features technology as its largest sector weight.

Said another way, investors are unlikely to find rival low volatility ETFs that feature Microsoft Corp. (MSFT) and Alphabet Inc. (GOOGL) as the top two holdings, as is the case with FDLO.

Standard operating procedure for many low volatility ETFs is to feature overweight exposure to the utilities and consumer staples sectors, and maybe healthcare, too. FDLO's 13.2% healthcare weight is nearly inline with the S&P 500, but the ETF's 3.1% utilities weight is low compared to competing volatility-fighting equity funds.

While FDLO has its perks, including the availability of trading the ETF without a commission charge on the Fidelity platform, this is still a low volatility fund. What that means is that investors should be prepared for some lagging when the broad market is sailing higher. For example, FDLO is up 8.4% since inception, a performance that lags the S&P 500 by about 200 basis points.

FDLO charges 0.29% per year, which is inexpensive relative to other smart beta strategies, but nearly double the 0.15% annual fee on the rival iShares Edge MSCI Min Vol USA ETF (USMV).

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