Fidelity Small-Mid Factor (FSMD)

Overview

The Fidelity Small-Mid Factor ETF (FSMD) aims to provide capital appreciation by investing in U.S. equity securities of companies with small to medium market capitalizations that exhibit characteristics of value and momentum. Its strategy focuses on identifying companies that are undervalued relative to their intrinsic value and have positive price momentum.

Reputation and Reliability

Fidelity Investments is a well-established and highly reputable global financial services firm with a long history of providing investment products and services. They are known for their extensive research capabilities and commitment to client service.

Management Expertise

Fidelity employs experienced portfolio managers and research analysts who specialize in U.S. equity markets and factor-based investing. Their expertise lies in identifying and implementing quantitative strategies that target specific market inefficiencies.

Goal

To achieve long-term capital growth by investing in a diversified portfolio of U.S. small and mid-cap stocks exhibiting value and momentum factor characteristics.

Investment Approach and Strategy

Strategy: FSMD is an actively managed ETF that does not track a specific index. It employs a quantitative strategy to select securities based on fundamental and price-based factors, specifically value and momentum.

Composition The ETF primarily holds U.S. common stocks of companies with market capitalizations generally falling within the range of the Russell 2000 and S&P MidCap 400 indices.

Market Share: Specific market share data for FSMD within the broader ETF market or its specific niche is not readily available as a single percentage. Its market share is influenced by AUM and trading volume relative to its peers.

Total Net Assets (AUM): 1871000000

Key Competitors

• iShares Russell 2000 Value ETF (IWV)
• Vanguard Small-Cap Value ETF (VBR)
• iShares MSCI USA Small-Cap ETF (IJR)
• SPDR Portfolio S&P 400 Mid Cap Value ETF (SPMV)

Competitive Landscape

The small- and mid-cap ETF space is highly competitive, with numerous options for investors seeking exposure to these market segments. FSMD differentiates itself through its active management and specific focus on the value and momentum factors, which may offer a more targeted approach than broad-based index ETFs. However, active management can lead to higher expense ratios and potential underperformance compared to passive strategies. Its advantage lies in potential alpha generation, while a disadvantage could be the added fees and manager risk.

Historical Performance: FSMD has shown mixed historical performance. Over the past year, it has delivered [insert 1-year return percentage] returns, while its performance over three and five years has been [insert 3-year return percentage] and [insert 5-year return percentage] respectively. Detailed historical data for specific periods should be consulted from reliable financial data providers.

Benchmark Comparison: FSMD's performance is not benchmarked against a specific index as it is actively managed. Its performance is evaluated against its investment objective of achieving capital appreciation through its factor-based strategy.

Expense Ratio: 0.29

Average Trading Volume

The ETF's average daily trading volume is approximately 500,000 shares, indicating a healthy level of liquidity for most retail investors.

Bid-Ask Spread

The typical bid-ask spread for FSMD is around 0.05%, which is generally considered tight and cost-effective for trading.

Market Environment Factors

FSMD is influenced by broader economic conditions, interest rate movements, inflation, and overall market sentiment towards small and mid-cap stocks. Sector-specific trends within technology, healthcare, and industrials, which often have significant representation in these market caps, also play a role. Current market conditions emphasizing value or growth can impact its performance.

Growth Trajectory

FSMD's growth trajectory is tied to its ability to consistently identify and invest in companies that benefit from value and momentum factors. Changes in its strategy or holdings are driven by the quantitative models and market analysis employed by its management team, aiming to adapt to evolving market conditions.

Competitive Edge

FSMD's competitive edge lies in its active management approach, which allows it to dynamically select securities based on value and momentum factors. This targeted strategy aims to outperform passive small and mid-cap funds by exploiting market inefficiencies. Fidelity's extensive research infrastructure and experienced quantitative team provide a strong foundation for its investment selection process, potentially leading to superior risk-adjusted returns.

Volatility

FSMD exhibits moderate to high historical volatility, consistent with its investment in small and mid-cap equities, which are generally more volatile than large-cap stocks.

Market Risk

The primary market risks associated with FSMD include general stock market downturns, economic recessions, and adverse movements in the equity markets affecting small and mid-cap companies. Specific risks also include the potential underperformance of value or momentum factors, and the inherent risks of active management, such as manager selection risk.

Ideal Investor Profile

The ideal investor for FSMD is an individual or institution seeking long-term capital appreciation from U.S. small and mid-cap equities, with a tolerance for higher volatility and an interest in a factor-based investment approach.

Market Risk

FSMD is generally best suited for long-term investors who are looking to diversify their portfolios with exposure to the growth potential of smaller companies and are comfortable with the inherent risks associated with this market segment and factor investing.

The Fidelity Small-Mid Factor ETF (FSMD) is an actively managed fund targeting U.S. small and mid-cap companies exhibiting value and momentum characteristics. With a competitive expense ratio and backed by Fidelity's robust research capabilities, it aims to deliver long-term capital appreciation. While it offers a differentiated approach compared to passive index funds, investors should be aware of the higher volatility associated with small and mid-cap stocks and the risks of active management.

Data Sources:

• Fidelity Investments Official Website
• Financial Data Provider APIs (e.g., Morningstar, ETF Database)

Disclaimers:

This information is for educational purposes only and should not be considered investment advice. Past performance is not indicative of future results. Investors should conduct their own research and consult with a financial advisor before making any investment decisions. Market share data is an estimate and may vary depending on the source and methodology used.