FSMD Profile
The Fidelity Small-Mid Factor ETF primarily allocates at least 80% of its assets to securities within the Fidelity Small-Mid Multifactor Index. This index is specifically designed to capture the performance of small- and mid-capitalization U.S. companies that exhibit attractive valuation metrics, high quality characteristics, positive momentum, and lower volatility relative to the broader market. By focusing on these factors, the ETF aims to identify and invest in companies with strong growth potential and favorable risk-return profiles.
The Fidelity Small-Mid Multifactor Index serves as the benchmark for the ETF, representing a curated selection of small- and mid-cap stocks that meet rigorous criteria across several key factors. These factors include valuation, quality, momentum, and volatility, which together help to highlight companies that are expected to perform well relative to their peers. The index provides a strategic approach to investing in smaller companies that may offer significant growth opportunities while managing risk through a multifactor screening process.
The ETF’s focus on smaller-cap companies allows investors to gain exposure to a segment of the market that is often associated with higher growth potential compared to larger, more established firms. The small- and mid-cap segment includes companies that are in various stages of growth and may offer innovative products or services. By incorporating multifactor criteria, the ETF seeks to enhance returns while mitigating some of the inherent risks associated with investing in smaller companies.
Managed by Fidelity Investments, the ETF benefits from the firm's extensive expertise in factor-based investing and its comprehensive research capabilities. Fidelity's approach integrates a deep understanding of market dynamics with advanced analytical tools to select securities that align with the fund’s strategic objectives. The result is a well-researched investment vehicle that provides targeted exposure to promising small- and mid-cap companies, aiming to deliver superior performance through a disciplined multifactor strategy.
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