Fidelity Small-Mid Multifactor ETF

Fidelity Small-Mid Multifactor ETF (FSMD) is an index fund that holds about 588 small and mid-sized US companies. It follows the Fidelity Small-Mid Multifactor Index, which picks stocks on four traits: value, quality, momentum and lower volatility. Its 0.15% expense ratio is above the 0.10% average of similar mid-cap funds. Its money is spread widely: the top 10 holdings made up 8.15% of assets as of July 31, 2026.

• Over the year to Oct 27, 2026, FSMD returned +15.5%, 4th of 9 among similar funds.
• Its 5-year annualized return was +9.4%.
• In the 2020 COVID crash it fell 40.6% and regained its old high 8 months after the low.
• Its worst full calendar year was 2022 (-11.2%); its best was 2021 (+26.4%).
• The deepest fall in its price history was 40.6% (Feb 19, 2020 to Mar 23, 2020), recovered by Nov 23, 2020.

As of Jul 31, 2026, the fund held 588 securities; the ten largest made up 8.15% of assets.

• Over the three months to Jul 31, 2026, investors added a net $51.1M (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: +2.42%, +5.93%, -4.19%.

FSMD normally puts at least 80% of its assets in stocks from the Fidelity Small-Mid Multifactor Index. The index starts with the small and mid-sized US companies in the Fidelity U.S. Extended Investable Market Index. Fidelity's rules then rank each stock and give it a combined score on four factors. Valuation measures how cheap a stock is. Quality looks at financial strength. Momentum looks at recent price trends. Volatility measures how much the price swings. The index favors stocks that look cheap, high quality and steadier, with positive momentum.

Weighting happens sector by sector. Each stock starts at its size-based weight in the parent index. Every stock in that sector then gets the same extra boost. Larger companies still get bigger positions, so the holdings stay spread out. As of July 31, 2026, the largest position was Sandisk at 2.33%, followed by Comfort Systems USA and Ciena. The prospectus summary doesn't say how often the index rebalances. Portfolio turnover was 38%.

The fund is passive: it tracks the index whatever the outlook for its stocks. It lends out securities to earn extra income, and the borrower could fail to return them. From December 11, 2025, derivatives count toward the 80% rule. As of July 31, 2026, its only derivative was a tiny Russell 2000 futures position. The fund uses no leverage or options.

• FSMD charges 0.15% a year, versus an average of 0.1% for the similar funds below (7th of 9, cheapest first).
• Using the prospectus's standard example, $10,000 invested would cost about $15 in the first year and $192 over 10 years (assuming a 5% annual return).

It adds broad exposure to small and mid-sized US companies, with a factor tilt, to a portfolio usually built around large-company stocks.

FSMD could spread a portfolio beyond the largest US companies. It launched in 2019, so it has no record from 2008. In the 2020 COVID crash it fell 40.6% from February 19 to March 23, 2020, and took about 8 months to recover. In the 2022 bear market it fell 20.3% and needed about 18 months to get back to its peak, in December 2023. Its worst calendar year was 2022, at −11.1%. Anyone who might need to sell shares in a bad year could be selling well below the peak. The yield was 1.31% as of October 27, 2026, paid quarterly, so this is not an income fund. The SEC's standard example puts the cost at $192 over 10 years 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.