Fidelity® Momentum Factor ETF (FDMO)

Overview

The Fidelity Momentum Factor ETF (FDMO) seeks to provide investment results that correspond to the performance of stocks of large and mid-capitalization U.S. companies with high momentum scores. The fund uses a rules-based methodology to select stocks exhibiting positive momentum characteristics, reflecting a strategy focused on capturing market trends.

Reputation and Reliability

Fidelity is a well-established and reputable financial services company with a long history of managing investment products.

Management Expertise

Fidelity has a large team of experienced investment professionals managing various ETFs and mutual funds.

Goal

To provide investment results that correspond to the performance of stocks of large and mid-capitalization U.S. companies with high momentum scores.

Investment Approach and Strategy

Strategy: The ETF tracks an index of US large and mid-cap stocks with high momentum characteristics.

Composition The ETF holds a diversified portfolio of stocks, primarily in the large and mid-cap segments, selected based on their momentum scores.

Market Share: The exact market share of FDMO within the momentum factor ETF segment is difficult to pinpoint without specific market data but is competitive.

Total Net Assets (AUM): 975500000

Key Competitors

• Invesco DWA Momentum ETF (PDP)
• iShares MSCI USA Momentum Factor ETF (MTUM)
• Alpha Architect U.S. Quantitative Momentum ETF (QMOM)

Competitive Landscape

The momentum factor ETF industry is moderately competitive, with several established players. FDMO benefits from Fidelity's brand recognition and distribution network. Competitors may have different index methodologies or lower expense ratios, impacting performance and investor preference.

Historical Performance: Historical performance data would be sourced from financial data providers to accurately reflect returns over various periods.

Benchmark Comparison: The ETF's performance should be compared to momentum indices or broad market indices like the S&P 500 to assess relative performance.

Expense Ratio: 0.29

Average Trading Volume

FDMO generally exhibits moderate trading volume, providing sufficient liquidity for most investors.

Bid-Ask Spread

The bid-ask spread for FDMO is typically tight, indicating relatively low trading costs.

Market Environment Factors

Economic growth, interest rates, and investor sentiment influence momentum strategies; strong economic periods often favor momentum stocks.

Growth Trajectory

The growth trajectory depends on market momentum and investor adoption of factor-based investing. Changes to the underlying index methodology or holdings would influence future performance.

Competitive Edge

FDMO benefits from Fidelity's established brand and distribution network. The rules-based momentum strategy aims to systematically capture price trends. Its competitive edge is the brand and wide access to information. It tries to identify the right time to enter and exit the market. The expense ratio is reasonable for the investment product.

Volatility

FDMO's volatility can be higher than broad market indices, as momentum stocks tend to experience greater price swings.

Market Risk

Specific risks include momentum crashes, where previously high-performing stocks suddenly decline, impacting the fund's value. Sector concentration can also pose a risk.

Ideal Investor Profile

Investors seeking capital appreciation through exposure to high-momentum stocks and who are comfortable with moderate to high volatility.

Market Risk

FDMO is suitable for long-term investors with a higher risk tolerance or active traders seeking to capitalize on short-term market trends. It might not be ideal for passive investors due to its factor-based approach.

Fidelity Momentum Factor ETF (FDMO) aims to track the performance of US large and mid-cap stocks with high momentum. It utilizes a rules-based methodology and benefits from Fidelity's brand recognition. The ETF provides exposure to a specific factor (momentum) and may exhibit higher volatility than the broad market. Investors should be aware of the risks and benefits associated with momentum-based strategies. It is suitable for investors seeking capital appreciation and who are comfortable with moderate to high volatility.

Data Sources:

• Fidelity Investments Website
• ETF.com
• Morningstar

Disclaimers:

This analysis is for informational purposes only and does not constitute investment advice. Past performance is not indicative of future results. Market conditions and investment strategies are subject to change.