As we wrap up 2025 and head into 2026, equities are still in control, but it's been a very narrow group of them leading the way. Over the past three years, technology and communication services, home of most of the "Magnificent Seven" stocks, have been the unquestioned leaders of the stock market rally. The artificial intelligence (AI) boom has certainly supported a lot of those gains, but it's looking like the market may finally be getting ready to rotate.
Fidelity and its lineup of more than 50 equity ETFs have a lot of options should market leadership broaden out beyond tech (although the Fidelity MSCI Information Technology ETF (FTEC 1.59%) has been an elite performer within that sector). Cyclicals, healthcare, and international stocks have all demonstrated strength over the past six to 12 months. That means investors should probably be looking at a lot of stock market sectors and themes for next year's winners.
Here are three Fidelity stock ETFs that could lead the market higher in 2026.
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1. Fidelity Quality Factor ETF
Quality stocks are never a bad thing to have in your portfolio. In 2026, however, they could be an especially attractive play.
The Fidelity Quality Factor ETF (FQAL 1.02%) takes the largest 1,000 stocks and examines them for free cash flow margin, cash flow stability, and return on invested capital. It's a simple strategy that targets big, durable, financially healthy companies.
There could be a dual benefit in 2026 though. Those quality screens and partial market cap-weighting methodology identify a lot of big tech companies and give them large allocations. FQAL's current top five holdings are Nvidia, Apple, Microsoft, Alphabet, and Broadcom.
NYSEMKT: FQAL
Key Data Points
If you think tech is going to keep running, FQAL gives you that exposure. But if you think the economy is going to slow and stocks might pull back, you've still got a high-quality portfolio that should hold up relatively well. It might be a win-win.
2. Fidelity High Dividend ETF
The Fidelity High Dividend ETF (FDVV 0.89%) was one of the best dividend ETFs of 2025 thanks to its overweight holdings in tech. The fund's name would have you believe that it's a pure high-yield play, but it's actually a little more than that. FDVV's strategy starts with the 1,000 largest U.S. & international stocks and then scores them using three dividend-related criteria:
- Dividend yield (70%)
- Dividend growth rate (15%)
- Payout ratio (15%)
Sector weights are tilted according to their dividend yield, but individual components within the sector are weighted by market value. This is how you get Nvidia, Apple, Microsoft, and Broadcom as the top four holdings despite relatively minimal yields.
NYSEMKT: FDVV
Key Data Points
The Fidelity High Dividend ETF has a similar investment case to FQAL. Its tech exposure can help it if market momentum continues, but the allocations to higher-yielding cyclicals and defensive sectors can provide some protection if the market turns lower.
It also carries a five-star Morningstar rating and has demonstrated its ability to produce above average returns over longer periods of time.
3. Fidelity Emerging Markets Multifactor ETF
International stocks have had a strong year in 2025, but the outperformance may only be beginning.
I like the Fidelity Emerging Markets Multifactor ETF (FDEM 2.17%) because it addresses some of the concerns that come with investing overseas. Instead of just owning the entire emerging markets basket, it screens companies for attractive valuations, strong quality profiles, positive momentum, and low volatility.
There's a lot of junk in the emerging markets indices, and a multifactor screen helps weed out a lot of it.
NYSEMKT: FDEM
Key Data Points
According to the International Monetary Fund (IMF), the U.S. economy is expected to grow 2.1% in 2026, but emerging markets are expected to grow by 4%. On top of that, FDEM's price/earnings (P/E) ratio of 13 is less than half that of the S&P 500's right now. Emerging markets usually trade at a discount to U.S. stocks, but the current gap is wider than average historically.
With the dollar trending lower, emerging markets could be lining up for another strong year.
