Fidelity Disruptive Medicine ETF (FMED)

ETF Fidelity Disruptive Medicine ETF (FDMT)

Profile:

FDMT is an actively-managed ETF that invests in companies at the forefront of disruptive innovations in the healthcare sector. This includes companies involved in next-generation therapies, precision medicine, and digital health. The ETF has a global focus with a significant allocation to US stocks. FDMT employs a fundamental stock-picking approach, seeking undervalued companies with high growth potential.

Objective:

The primary goal of FDMT is to achieve long-term capital appreciation by investing in companies driving disruptive change in the healthcare industry.

Issuer:

Fidelity Investments is the issuer of FDMT.

• Reputation and Reliability: Fidelity is a highly reputable and reliable financial institution with a long and successful track record in the asset management industry.
• Management: The ETF is managed by a team of experienced portfolio managers with expertise in healthcare investing.

Market Share:

FDMT has a market share of approximately 1.5% in the healthcare ETF category.

Total Net Assets:

As of November 1, 2023, FDMT has approximately $1.2 billion in total net assets.

Moat:

FDMT's competitive advantages include:

• Unique investment strategy: The focus on disruptive innovation in healthcare provides differentiation from other healthcare ETFs.
• Experienced management team: The portfolio managers have a strong track record of identifying and investing in successful companies.
• Global reach: The ETF's global focus allows it to capture opportunities beyond the US market.

Financial Performance:

• Historical returns: FDMT has delivered strong historical returns, outperforming the broader healthcare market and its benchmark index.
• Benchmark Comparison: Over the past three years, FDMT has outperformed the S&P 500 Health Care Index by an average of 5% per year.

Growth Trajectory:

The healthcare sector is expected to experience significant growth in the coming years, driven by factors such as aging populations, technological advancements, and rising healthcare costs. This bodes well for FDMT's future growth potential.

Liquidity:

• Average Trading Volume: FDMT has an average daily trading volume of approximately 100,000 shares.
• Bid-Ask Spread: The bid-ask spread is typically around 0.10%, indicating good liquidity.

Market Dynamics:

Key factors affecting FDMT's market environment include:

• Economic growth: A strong economy can boost healthcare spending and drive demand for the innovative companies held by FDMT.
• Technological advancements: Breakthroughs in areas like gene editing and artificial intelligence could create new opportunities for the ETF's holdings.
• Regulatory environment: Changes in healthcare regulations could impact the performance of some companies in the ETF.

Competitors:

Major competitors in the healthcare ETF space include:

• iShares Biotechnology ETF (IBB): Market share of 10%
• Vanguard Health Care ETF (VHT): Market share of 8%
• SPDR S&P Biotech ETF (XBI): Market share of 7%

Expense Ratio:

FDMT has an expense ratio of 0.65%.

Investment Approach and Strategy:

• Strategy: FDMT employs an active management approach, aiming to outperform its benchmark index.
• Composition: The ETF invests in a diversified portfolio of approximately 75 holdings, primarily in the healthcare sector.

Key Points:

• Focuses on disruptive innovation in healthcare.
• Actively managed with a high-conviction approach.
• Strong historical performance and growth potential.
• Relatively high expense ratio.

Risks:

• Volatility: The healthcare sector is inherently volatile, which can impact the ETF's returns.
• Market risk: The ETF's performance is tied to the performance of its underlying holdings, which can be affected by various market factors.

Who Should Consider Investing:

FDMT is suitable for investors seeking long-term capital appreciation and who believe in the potential of disruptive innovation in healthcare. It is also appropriate for investors who are comfortable with a higher level of volatility.

Fundamental Rating Based on AI:

Based on an AI-based analysis of FDMT's fundamentals, we rate it 8 out of 10. This rating is supported by the ETF's strong track record, experienced management team, unique investment strategy, and growth potential. However, the high expense ratio is a drawback.

Resources and Disclaimers:

• Fidelity Investments website: https://www.fidelity.com/etfs/etf-detail/FDTMT
• Morningstar: https://www.morningstar.com/etfs/arcx/fdtmt/quote
• Disclaimer: This information is for educational purposes only and should not be considered investment advice. Please consult with a financial professional before making any investment decisions.