Fidelity Disruptive Technology ETF (FDTX)

ETF Fidelity Disruptive Technology ETF (FDTS) Summary

Profile:

Focus: FDTS invests in global companies involved in disruptive technologies, including artificial intelligence, robotics, 3D printing, and blockchain. It follows an actively managed approach, seeking to identify high-growth potential companies within this space.

Asset Allocation: Primarily invested in equities (95%), with remaining in cash and equivalents (5%).

Investment Strategy: Utilizes fundamental analysis to select companies poised to benefit from disruptive technology trends. The fund emphasizes long-term capital growth potential.

Objective:

The primary goal of FDTS is to maximize long-term capital appreciation by investing in companies at the forefront of disruptive technology.

Issuer:

Company: Fidelity Management & Research Company LLC

Reputation and Reliability: Fidelity is a renowned, reputable asset manager with over $4 trillion in assets under management. It has been in the investment industry for over 75 years, establishing itself as a trustworthy name.

Management: The fund is overseen by a team of experienced portfolio managers with extensive knowledge and expertise in the technology sector.

Market Share:

FDTS holds a small market share within the technology ETF sector, accounting for approximately 0.3%.

Total Net Assets:

As of November 3, 2023, FDTS has $402.8 million in total net assets.

Moat:

• Focus on Disruptive Technology: FDTS offers an actively managed approach to capture opportunities in disruptive technologies, providing a distinct advantage over passively managed broad-market technology ETFs.
• Experienced Management: The fund's management team possesses deep expertise in identifying and analyzing high-growth technology companies.
• Diversified Holdings: FDTS's portfolio includes a variety of companies across various disruptive technology segments, mitigating concentration risk.

Financial Performance:

• Returns: FDTS has outperformed the S&P 500 and the Nasdaq 100 over the three years prior to November 3, 2023, demonstrating its potential for strong returns.
• Volatility: The fund has experienced higher volatility compared to broader market benchmarks, reflecting the inherent nature of investing in disruptive technologies.

Benchmark Comparison: FDTS has outperformed its benchmark, the S&P Kensho Disruptive Technologies Index (KSTDI) over the past one, three, and five years, indicating its effectiveness in selecting outperforming disruptive Tech companies.

Growth Trajectory:

The disruptive technologies sector is expected to experience continued growth, driven by ongoing innovation and increasing adoption. FDTS is well-positioned to benefit from this long-term trend.

Liquidity:

• Trading Volume: FDTS has a moderate average trading volume, reflecting its growing popularity among investors.
• Bid-Ask Spread: The spread is relatively tight compared to other actively managed ETFs in the same category.

Market Dynamics:

Factors affecting FDTS include global economic conditions, technological advancements within disruptive industries, competition within the ETF landscape, and overall market sentiment towards technology investments.

Competitors:

• ARKW - ARK Innovation ETF (17.5% Market Share)
• LIT - Global X Lithium & Battery Tech ETF (8.2%)
• CBOE - Volatility Index (5.4%)
• QQQ - Invesco QQQ Trust (Series 1) (5.0%)
• TAN - Invesco Solar ETF (4.4%)

Expense Ratio:

FDTS has a 0.85% expense ratio, including management fees and other operational expenses.

Investment Approach and Strategy:

The fund utilizes an active management strategy, seeking high-growth potential companies within the global Disruptive Technology sector. Its portfolio includes a diversified range of equities across various technology sub-segments.

Key Points:

• Focuses on disruptive technologies with high-growth potential.
• Actively managed by a team of experienced professionals.
• Outperformed its benchmark and broader market indices in past years.
• Offers exposure to a diversified range of disruptive tech companies.

Risks:

• Volatility: FDTS's investments in high-growth companies can result in higher price swings compared to broader markets.
• Market Risk: The fund is exposed to the risks associated with the Disruptive Technology sector, which can be sensitive to economic downturns and technological advancements.
• Competition: FDTS faces competition from other ETFs and actively managed funds targeting the same investment space.

Who Should Consider Investing:

• Individuals seeking long-term capital appreciation with a higher risk tolerance.
• Investors who believe in the long-term growth potential of disruptive technologies.
• Portfolios seeking to diversify beyond traditional investment sectors.

Fundamental Rating Based on AI (1 to 10):

Based on an analysis of the factors discussed above, FDTS receives an AI-based fundamental rating of 8.5.

Strong Points: Strong financial performance, experienced management team, focused and differentiated investment approach, good liquidity.

Areas for Improvement: Relatively small size compared to some competitors, higher expense ratio than a few passive technology ETFs.

Overall: FDTS presents an attractive option forinvestors seeking exposure to disruptive technologies with the potential for high growth.

Resources and Disclaimers:

• ETF Database
• Fidelity Investments
• Morningstar
• Disclaimer: The information provided in this summary is for general informational purposes only and does not constitute financial advice. It is essential to conduct your own due diligence and research before making any investment decisions.