5 min readBy Ron Koren ETF Insider
How does the FSMD ETF work?
The FSMD ETF is a specialized investment fund that focuses on a specific sector. This exchange-traded fund offers investors exposure to a range of companies in this sector.
The Fidelity Small-Mid Multifactor ETF (FSMD) is managed by Fidelity Investments, a well-established and reputable asset management company. Fidelity has a long history of providing a wide range of investment solutions to investors, including ETFs.
While the Fidelity Small-Mid Multifactor ETF (FSMD) primarily focuses on investing in securities from the Fidelity Small-Mid Multifactor IndexSM, dividend distributions are still a significant aspect for investors. These distributions typically occur periodically, and their frequency and size are influenced by the dividend policies and performances of the constituent companies within the index. FSMD aims to strike a balance between capital appreciation and dividend income, making it an appealing choice for investors seeking exposure to small- and mid-cap U.S. companies with attractive valuations, quality profiles, and positive momentum signals.
The Fidelity Small-Mid Multifactor ETF, FSMD, is dedicated to tracking the Fidelity Small-Mid Multifactor IndexSM. This index is meticulously designed to mirror the performance of small- and mid-capitalization U.S. companies that exhibit attractive valuations, high-quality profiles, positive momentum signals, and lower volatility compared to the broader market, represented by the Fidelity U.S. Extended Investable Market IndexSM. FSMD seeks to achieve its investment objectives by investing at least 80% of its assets in securities that are part of the Fidelity Small-Mid Multifactor IndexSM, all while generating income for the fund through lending securities. It is an ideal choice for investors seeking exposure to a diversified basket of promising small- and mid-cap U.S. stocks with multifactor selection criteria.
The correlation aspect of the Fidelity Small-Mid Multifactor ETF (FSMD) is primarily influenced by its investment strategy, which targets small- and mid-cap U.S. companies with specific characteristics. As FSMD seeks to mirror the performance of the Fidelity Small-Mid Multifactor IndexSM, it typically exhibits correlations with the broader U.S. equities market. Investors can expect FSMD to have moderate to high correlation with the overall market, given its focus on domestic equities. Analyzing FSMD's correlation can assist investors in assessing its potential diversification benefits or tracking the performance of smaller U.S. companies within their portfolios.
The Fidelity Small-Mid Multifactor ETF (FSMD) primarily focuses on the small- and mid-cap sector of the U.S. market, with its investments designed to reflect the performance of companies exhibiting attractive valuations, high-quality profiles, positive momentum signals, and lower volatility compared to the broader market. By concentrating on this segment, FSMD offers investors exposure to potential growth opportunities in smaller companies with promising characteristics. However, it's important to note that investing in smaller-cap stocks can be associated with higher levels of risk and volatility compared to larger-cap counterparts.
The Fidelity Small-Mid Multifactor ETF (FSMD) primarily focuses on offering exposure to small- and mid-cap U.S. companies that exhibit attractive valuations, high-quality profiles, positive momentum signals, and lower volatility compared to the broader market. This ETF seeks to replicate the performance of the Fidelity Small-Mid Multifactor IndexSM, which is designed to provide investors with a diversified exposure to this specific segment of the U.S. equity market. By investing at least 80% of its assets in securities included in the index, FSMD allows investors to potentially benefit from the unique characteristics and growth potential of small- and mid-cap stocks.
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ETF Insider is a novel portfolio optimization tool that uses the power of data visualization to gain insight into portfolio compositions, concentration risks, portfolio efficiency and more. Complex financial data can be transformed into visually appealing and easily digestible graphs and charts, allowing investors to quickly identify trends and make well-informed investment decisions. Not only does this save time, but it also increases the accuracy and effectiveness of portfolio management.
