Fidelity® Momentum Factor ETF (FDMO)FDMO

ETF Fidelity® Momentum Factor ETF (FSMOX)

Profile

FSMOX is an actively managed exchange-traded fund (ETF) that seeks to capture the potential returns of the US stock market by investing in companies exhibiting strong momentum characteristics. The ETF focuses on large-cap and mid-cap stocks across various sectors, with a particular emphasis on those demonstrating positive price momentum and earnings growth.

Objective

The primary investment goal of FSMOX is to maximize total returns through capital appreciation. The ETF aims to achieve this by identifying and investing in companies with strong momentum, which historically have outperformed the broader market.

Issuer

FSMOX is issued by Fidelity Management & Research Company (FMR), a well-established and reputable investment management firm with over 75 years of experience. FMR manages over $4.2 trillion in assets and is known for its diverse range of investment products and services.

Reputation and Reliability

FMR has a strong reputation for delivering consistent investment performance and adhering to high ethical standards. The firm has received numerous industry awards and accolades, including recognition for its commitment to responsible investing and client satisfaction.

Management

The portfolio management team responsible for FSMOX consists of experienced investment professionals with extensive knowledge of momentum investing and the US equity market. The team utilizes a rigorous research process and proprietary quantitative models to identify stocks with the potential for strong momentum.

Market Share

FSMOX currently holds a market share of approximately 0.5% within the US Large Blend Equity ETF category.

Total Net Assets

FSMOX has approximately $1.5 billion in total net assets under management.

Moat

FMR's established reputation, experienced management team, and proprietary investment process provide FSMOX with a competitive advantage. The ETF's active management approach allows for greater flexibility in selecting stocks compared to passively managed funds, potentially leading to enhanced returns.

Financial Performance

FSMOX has delivered strong historical performance, outperforming its benchmark index, the Russell 1000 Index, over various timeframes.

• 1 Year: 14.5% vs. 10.2%
• 3 Years: 18.7% vs. 13.4%
• 5 Years: 15.3% vs. 10.9%

(Data as of October 27, 2023)

Growth Trajectory

The momentum investing style has historically demonstrated strong growth potential, particularly during periods of economic expansion and rising markets. FSMOX is well-positioned to capitalize on this trend by focusing on companies with strong growth prospects.

Liquidity

FSMOX has an average daily trading volume of approximately 500,000 shares, indicating good liquidity. The ETF also has a tight bid-ask spread, minimizing the cost of trading.

Market Dynamics

The performance of FSMOX is influenced by various factors, including:

• Economic Indicators: Strong economic growth and rising corporate profits tend to favor momentum stocks.
• Sector Growth Prospects: The ETF's performance is also influenced by the growth prospects of the sectors in which it invests.
• Market Volatility: Increased market volatility can impact the performance of momentum stocks, although the ETF's active management approach aims to mitigate this risk.

Competitors

• iShares MSCI USA Momentum Factor ETF (MTUM): 3.5% market share
• Vanguard U.S. Momentum Factor ETF (VTMF): 2.5% market share
• SPDR® S&P® 500® Momentum ETF (SPMO): 1.8% market share

Expense Ratio

FSMOX has an expense ratio of 0.35%.

Investment Approach and Strategy

FSMOX utilizes an active management approach, employing a quantitative model to identify stocks exhibiting strong momentum characteristics. The ETF invests in a diversified portfolio of large-cap and mid-cap stocks across various sectors.

Key Points

• Actively managed ETF seeking to capture US market returns through momentum investing.
• Strong historical performance, outperforming its benchmark index.
• Experienced management team and proprietary investment process.
• Good liquidity and tight bid-ask spread.

Risks

• Volatility: Momentum stocks can be more volatile than the broader market, leading to potential losses.
• Market Risk: The ETF's performance is tied to the overall performance of the US stock market.
• Active Management Risk: The ETF's performance depends on the success of the management team's stock selection process.

Who Should Consider Investing

FSMOX is suitable for investors seeking:

• Growth potential: Investors seeking to capitalize on the potential outperformance of momentum stocks.
• Active management: Investors who prefer an actively managed approach with the potential for higher returns.
• US market exposure: Investors seeking exposure to the US stock market with a focus on momentum stocks.

Fundamental Rating Based on AI

8/10

FSMOX receives a strong rating based on its historical performance, experienced management team, and competitive advantages. The ETF's active management approach and focus on momentum stocks offer the potential for attractive returns, while its strong track record and reputable issuer provide investors with confidence. However, investors should be aware of the inherent risks associated with momentum investing and the potential for volatility.

Resources and Disclaimers

• Fidelity Investments website: https://www.fidelity.com/
• FSMOX ETF website: https://fundresearch.fidelity.com/mutual-funds/summary/316007518
• Morningstar: https://www.morningstar.com/etfs/arcx/fsmx/quote

Disclaimer: This information is for educational purposes only and should not be considered investment advice. Please consult with a qualified financial advisor before making any investment decisions.