FESM - ETF AI Analysis
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Fidelity Enhanced Small Cap ETF (FESM)
FESM, the Fidelity Enhanced Small Cap ETF, earns a solid overall rating largely because several key holdings like EnerSys, Abercrombie & Fitch, HealthEquity, and Option Care Health show strong financial performance, positive earnings calls, and supportive technical trends, which together provide a favorable foundation for the fund. At the same time, weaker names such as Oscar Health, with profitability and cash flow challenges, and more leveraged or valuation-stretched holdings like Outfront Media and Installed Building Products, introduce risk and help explain why the rating is not higher. The main risk factor is the fund’s exposure to small-cap companies with higher leverage, profitability pressures, and valuation concerns, which can make the ETF more volatile and sensitive to market downturns.
FESM vs. SPDR S&P 500 ETF (SPY)
- AUM
- 6.85B
- Region
- North America
- Expense Ratio
- 0.28%
- Beta
- 1.08
- Issuer
- Fidelity
- Inception Date
- Nov 20, 2023
- Dividend Yield
- 0.86%
- Asset Class
- Equity
- Index Tracked
- No Underlying Index
FESM Summary
The Fidelity Enhanced Small Cap ETF (FESM) focuses on smaller U.S. companies, aiming to beat the general small‑cap market rather than track a specific index. It spreads investments across many sectors, including health care, technology, and financials, and holds names like Abercrombie & Fitch and Commercial Metals Company. Investors might consider FESM if they want growth potential and diversification through a wide mix of smaller, more agile businesses. However, small‑cap stocks can be more volatile than larger, well‑known companies, so the value of this ETF can rise and fall sharply with market conditions.
How much will it cost me?
This ETF has an expense ratio of 0.28%, which means you’ll pay about $2.80 per year for every $1,000 invested. That cost is a bit higher than the cheapest index ETFs because it uses an enhanced, actively researched strategy rather than simply tracking a basic small-cap index.
What would affect this ETF?
FESM could benefit if the U.S. economy stays healthy, interest rates stabilize or fall, and small, innovative companies in sectors like health care, technology, and industrials continue to grow, supporting its diversified small-cap portfolio. On the downside, higher interest rates, an economic slowdown in the U.S., or tighter regulations on health care and financial firms could hurt smaller companies more than large ones, making this ETF more volatile and sensitive to market stress.
FESM Top 10 Holdings
FESM leans heavily into U.S. small caps, with health care and industrial names setting the tone. Glaukos and Plexus have been rising, giving the fund a helpful lift, while Abercrombie & Fitch adds extra momentum from the consumer side. On the flip side, Oscar Health is lagging despite its long-term promise, and Installed Building Products has been losing steam, weighing on returns. Overall, the ETF is broadly diversified across sectors, but its story is driven by nimble health care, industrial, and consumer names trying to outrun the typical small-cap volatility.
| Name | Company Name | Weight % | Market Value | Market Cap | Yearly Gain | Overall Rating |
|---|---|---|---|---|---|---|
 GKOS | Glaukos | 1.02% | $69.80M | $14.07B | 170.62% | 61Neutral |
 CMC | Commercial Metals Company | 0.75% | $51.65M | $7.04B | 6.81% | 70Neutral |
 FLR | Fluor | 0.73% | $49.95M | $6.27B | -3.96% | 64Neutral |
 OSCR | Oscar Health | 0.72% | $49.53M | $9.38B | 67.88% | 49Neutral |
 OUT | Outfront Media | 0.72% | $49.27M | $5.64B | 85.72% | 69Neutral |
 ANF | Abercrombie Fitch | 0.71% | $48.98M | $6.98B | 127.69% | 78Outperform |
 IBP | Installed Building Products | 0.71% | $48.59M | $5.67B | -16.01% | 74Outperform |
 ENS | EnerSys | 0.69% | $47.54M | $5.77B | 27.76% | 79Outperform |
 HQY | Healthequity | 0.69% | $47.50M | $8.48B | 10.24% | 76Outperform |
 GFF | Griffon | 0.67% | $45.76M | $4.58B | 35.18% | 61Neutral |
FESM Technical Analysis
Price Trends
Market Momentum
Evaluating momentum and price trends is crucial in ETF analysis to make informed investment decisions. For FESM, the sentiment is Neutral. The current price of 45.47 is above the 20-day moving average (MA) of 45.27, below the 50-day MA of 45.90, and above the 200-day MA of 43.76, indicating a neutral trend. The MACD of -0.03 indicates Negative momentum. The RSI at 49.86 is Neutral, neither overbought nor oversold. The STOCH value of 80.58 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for FESM.
FESM Peer Comparison
Comparison Results
| Name | Price | Price Target | AUM | Expense Ratio | Overall Rating |
|---|---|---|---|---|---|
| FESM | $45.47 | $48.00(5.56% Upside) | $6.85B | 0.28% | 64Neutral |
 FELC | $42.70 | $52.74(23.52% Upside) | $8.88B | 0.18% | 73Outperform |
 DFSV | $39.44 | $45.79(16.11% Upside) | $8.57B | 0.30% | 68Neutral |
 AVSC | $71.28 | $87.32(22.50% Upside) | $3.23B | 0.25% | 66Neutral |
 PSC | $68.37 | $82.07(20.04% Upside) | $2.78B | 0.38% | 69Neutral |
 BSVO | $28.97 | $34.35(18.56% Upside) | $2.48B | 0.45% | 67Neutral |
Performance Comparison
| Show on chart | Ticker | Company Name | Price | Change | % Change |
|---|---|---|---|---|---|
| FESM | Fidelity Enhanced Small Cap ETF | 45.47 | 8.67 | 23.55% | |
| FELC | Fidelity Enhanced Large Cap Core ETF | 42.70 | 4.97 | 13.16% | |
| DFSV | Dimensional US Small Cap Value ETF | 39.44 | 8.47 | 27.34% | |
| AVSC | Avantis U.S Small Cap Equity ETF | 71.28 | 14.70 | 25.98% | |
| PSC | Principal U.S. Small-Cap Multi-Factor ETF | 68.37 | 12.25 | 21.83% | |
| BSVO | EA Bridgeway Omni Small-Cap Value ETF | 28.97 | 6.84 | 30.90% |
This AI Analyst ETF Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in ETFs carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.