Fidelity® Momentum Factor ETF (FDMO)

Overview

The Fidelityu00ae Momentum Factor ETF (FMOE) is an actively managed equity ETF that seeks to provide capital appreciation. It invests primarily in U.S. equity securities of companies that Fidelity's portfolio managers believe exhibit positive momentum characteristics, meaning they have demonstrated strong price performance over a recent period. The fund aims to identify companies that are likely to continue their upward price trend.

Reputation and Reliability

Fidelity Investments is a well-established and highly reputable financial services firm with a long history and a strong track record in asset management. They are known for their extensive research capabilities and robust operational infrastructure.

Management Expertise

The ETF is actively managed by Fidelity's experienced team of portfolio managers. Their expertise lies in quantitative analysis and identifying factors that drive stock performance, particularly momentum.

Goal

The primary investment goal of the Fidelityu00ae Momentum Factor ETF is to achieve capital appreciation by investing in U.S. equity securities exhibiting positive momentum.

Investment Approach and Strategy

Strategy: FMOE is an actively managed ETF that does not track a specific index. Its strategy is to identify and invest in companies demonstrating positive momentum, aiming to capture upward price trends.

Composition The ETF primarily holds U.S. equity securities, focusing on large- and mid-capitalization stocks that exhibit characteristics of positive momentum. The specific holdings can change based on the portfolio managers' assessment of momentum factors.

Market Share: Data on specific market share for individual momentum factor ETFs is not readily available in a consolidated public format, but FMOE is part of a growing segment of factor-based investing.

Total Net Assets (AUM): 1500000000.5

Key Competitors

• iShares MSCI USA Momentum Factor ETF (MTUM)
• SPDRu00ae Portfolio S&P 500 Momentum ETF (SPMO)
• Invesco S&P 500 Momentum ETF (SPMO)

Competitive Landscape

The momentum factor ETF market is competitive, with several large issuers offering similar strategies. FMOE competes by leveraging Fidelity's active management expertise and proprietary research. A potential disadvantage is the higher expense ratio compared to some passively managed momentum ETFs, while its advantage lies in the potential for more dynamic adjustments to holdings based on evolving momentum signals.

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Benchmark Comparison: FMOE aims to outperform a broad market index like the S&P 500 by focusing on momentum stocks. Its performance relative to such benchmarks will vary depending on the market cycle and the effectiveness of its momentum strategy. Over longer periods, its goal is to provide alpha generation.

Expense Ratio: 0.55

Average Trading Volume

The ETF exhibits moderate average daily trading volume, suggesting reasonable liquidity for most investors.

Bid-Ask Spread

The bid-ask spread is generally tight, indicating efficient trading and minimal transaction costs for most market participants.

Market Environment Factors

FMOE is influenced by factors that drive equity markets, such as interest rate policies, inflation, economic growth, and investor sentiment. Sectors that are currently experiencing strong performance are more likely to be favored by its momentum strategy.

Growth Trajectory

The ETF has seen steady growth in AUM, indicating investor interest in factor-based strategies. Its strategy may evolve as Fidelity refines its quantitative models for identifying momentum.

Competitive Edge

FMOE's competitive edge stems from Fidelity's active management approach and deep quantitative research capabilities. The ETF seeks to exploit short-to-intermediate term price trends by systematically identifying and investing in companies with strong positive momentum. This active selection process aims to outperform passive momentum strategies by adapting to changing market dynamics and potentially mitigating risks associated with overcrowded trades.

Volatility

FMOE exhibits moderate to high volatility, characteristic of equity ETFs focused on growth and momentum strategies. Its performance can be subject to significant swings, especially during periods of market correction or sector rotation.

Market Risk

The ETF is exposed to equity market risk, including the risk of a general downturn in the stock market. Specifically, momentum strategies can be vulnerable to sudden reversals, where previously high-performing stocks experience rapid declines.

Ideal Investor Profile

The ideal investor for FMOE is one seeking capital appreciation, comfortable with higher risk and volatility, and who believes in the effectiveness of momentum as an investment factor. They should have a long-term investment horizon to ride out potential short-term fluctuations.

Market Risk

FMOE is best suited for investors who are looking for active management to potentially enhance returns beyond passive index tracking, and who understand the specific risks associated with momentum investing. It can be a component of a diversified portfolio for investors seeking a growth-oriented strategy.

The Fidelityu00ae Momentum Factor ETF (FMOE) is an actively managed fund that targets U.S. equities demonstrating positive price momentum, aiming for capital appreciation. Managed by Fidelity's experienced team, it offers a distinct strategy compared to passive ETFs. While it competes in a crowded market, its active management and research provide a potential edge. Investors should be aware of its moderate to high volatility and susceptibility to market reversals, making it suitable for those with a growth objective and risk tolerance.

Data Sources:

• Fidelity Investments Official Website
• ETF Data Aggregators (e.g., ETF.com, Seeking Alpha)

Disclaimers:

This information is for educational purposes only and should not be considered investment advice. Past performance is not indicative of future results. Investment in ETFs involves risk, including the possible loss of principal.