Fidelity Fundamental Small-Mid Cap ETF

Fidelity Fundamental Small-Mid Cap ETF (FFSM) is an actively managed fund that picks small and mid-sized company stocks using Fidelity's analyst research. It held 217 stocks as of July 31, 2026. It is a semi-transparent ETF, which means it does not publish its full holdings every day. Its 0.43% expense ratio is well above the 0.19% average for similar funds, so the case for owning it rests on Fidelity's stock picking.

• Over the year to Oct 27, 2026, FFSM returned +13.7%, 6th of 9 among similar funds.
• Its worst full calendar year was 2025 (+14.9%); its best was 2025 (+14.9%).
• The deepest fall in its price history was 24.8% (Nov 25, 2024 to Apr 8, 2025), recovered by Sep 5, 2025.

As of Jul 31, 2026, the fund held 217 securities; the ten largest made up 13.99% of assets.

• Over the three months to Jul 31, 2026, investors added a net $168.1M (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: +0.87%, +5.90%, -3.57%.

FFSM does not track an index. Its adviser, Fidelity Management & Research Company (FMR), aims for long-term growth of capital. The fund normally invests at least 80% of assets in small and mid-sized companies, meaning companies whose market values are similar to those in the Russell 2500 index. The process starts with recommendations from Fidelity's analysts and with reference portfolios built on that research. A quantitative step, a rules-based model, then builds the portfolio. It leans toward the stocks Fidelity has the most conviction in while managing risk, liquidity and trading costs. The fund can own growth stocks, value stocks and some foreign companies.

As of July 31, 2026, the 10 largest holdings made up only 14% of assets. The biggest were IES Holdings (1.7%), ATI (1.6%) and TD Synnex (1.5%). Turnover was 66%, so the fund trades fairly often.

Unlike most ETFs, FFSM does not show its holdings daily. Instead it posts a daily "Tracking Basket" made up of some recent holdings, similar stocks, other ETFs and cash. It also posts how closely that basket overlaps the real portfolio. The prospectus warns this setup may cause wider bid-ask spreads and bigger gaps between the share price and NAV (net asset value, the per-share worth of the holdings).

• FFSM charges 0.43% a year, versus an average of 0.19% for the similar funds below (8th of 9, cheapest first).
• Using the prospectus's standard example, $10,000 invested would cost about $44 in the first year and $542 over 10 years (assuming a 5% annual return).

It is an actively managed small- and mid-cap stock fund that swings more than the overall market, so it works best alongside a broader core holding rather than as one.

FFSM could add smaller US companies, which large-cap index funds barely own. The trade-off is bigger swings: its beta was 1.17 for the year to October 27, 2026, so it tended to move about 17% more than the market. The fund launched in 2021, so it has no record from the 2008 or 2020 crashes. It lost 16.43% in 2022, its worst calendar year. Its deepest price drop, 24.8%, ran from November 25, 2024 to April 8, 2025. It recovered by September 5, 2025. Selling shares during a drop like that locks in the loss. Income is small: the yield was 0.5% as of October 27, 2026, paid quarterly. The SEC's standard example puts costs at $44 for the first year on $10,000. Past results don't predict the future, and a plan should look at the whole portfolio, not one fund.

Matched by holdings overlap from the latest N-PORT reports.