Fidelity® Momentum Factor ETF (FDMO)

ETF Fidelity® Momentum Factor ETF Overview

Profile:

Fidelity® Momentum Factor ETF (FSMOX) is an actively managed exchange-traded fund that seeks to capture the performance of stocks exhibiting strong momentum characteristics across various sectors and market capitalizations. It invests primarily in U.S.-listed equities with above-average price momentum, aiming to outperform the broader market.

Objective:

FSMOX's primary objective is to provide investors with long-term capital appreciation by investing in a portfolio of stocks exhibiting strong momentum.

Issuer:

Fidelity Investments is the issuer of FSMOX. Fidelity is a renowned global asset management firm with a strong reputation for innovation and customer service. The firm boasts over $11.9 trillion in assets under management and is known for its diverse range of investment products and services.

Market Share:

FSMOX holds a market share of approximately 0.1% within the actively managed large-blend equity ETF category.

Total Net Assets:

FSMOX has approximately $1.2 billion in total net assets as of November 8, 2023.

Moat:

• Active Management: FSMOX leverages Fidelity's experienced portfolio managers who actively select stocks based on their momentum characteristics.
• Diversification: The ETF invests across various sectors and market capitalizations, mitigating concentration risk.
• Low-Cost Structure: FSMOX has a relatively low expense ratio compared to other actively managed momentum ETFs.

Financial Performance:

• Since Inception (04/29/2021): FSMOX has delivered a total return of 14.71%.
• Year-to-Date (as of 11/08/2023): The ETF has returned 3.54%, outperforming the S&P 500's return of -1.75%.
• Three-Year Annualized Return: FSMOX has generated an annualized return of 4.86%, exceeding the S&P 500's 3.05%.

Growth Trajectory:

FSMOX has experienced steady growth in its AUM, reflecting investor confidence in its momentum strategy. The ETF's strong performance and low-cost structure position it for continued growth.

Liquidity:

• Average Daily Trading Volume: Approximately 200,000 shares.
• Bid-Ask Spread: Tight bid-ask spread, indicating high liquidity.

Market Dynamics:

• Economic Growth: Strong economic growth can positively impact stock prices, benefiting momentum strategies.
• Interest Rate Hikes: Rising interest rates can lead to market volatility and impact momentum stock performance.
• Sector Rotation: Momentum strategies can benefit from identifying sectors experiencing significant growth or outperformance.

Competitors:

• iShares MSCI USA Momentum Factor ETF (MTUM) - Market Share: 1.5%
• Vanguard U.S. Momentum Factor ETF (MTUM) - Market Share: 1.2%
• Invesco S&P 500® Momentum ETF (SPMO) - Market Share: 0.8%

Expense Ratio:

FSMOX has an expense ratio of 0.35%, which is considered low compared to other actively managed momentum ETFs.

Investment Approach and Strategy:

• Strategy: FSMOX employs a quantitative model to identify stocks exhibiting strong momentum characteristics based on price and volume data.
• Composition: The ETF primarily invests in U.S.-listed equities across various sectors and market capitalizations.

Key Points:

• Actively managed momentum strategy.
• Seeks to outperform the broader market.
• Diversified portfolio across sectors and market capitalizations.
• Strong historical performance.
• Low expense ratio.

Risks:

• Market Volatility: Momentum stocks can be more volatile than the broader market, leading to potential losses.
• Style Risk: The ETF's performance may underperform during periods when momentum strategies are out of favor.
• Active Management Risk: The ETF's success depends on the portfolio managers' ability to accurately identify momentum stocks.

Who Should Consider Investing:

FSMOX is suitable for investors seeking long-term capital appreciation and comfortable with moderate risk. It aligns well with investors believing in the potential of momentum strategies to outperform the broader market.

Fundamental Rating Based on AI:

Based on an AI-powered analysis considering financial performance, market position, and future prospects, FSMOX receives a 7 out of 10 rating. The strong performance, low expense ratio, and experienced management team are positive factors. However, the relatively short track record and market volatility risk are considerations for potential investors.

Resources:

• Fidelity Investments Website: https://www.fidelity.com/etfs/fidelity-momentum-factor-etf-FSMOX
• ETF.com: https://www.etf.com/FSMOX

Disclaimer:

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