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FESM - ETF AI Analysis

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FESM

Fidelity Enhanced Small Cap ETF (FESM)

Rating:65Neutral
Price Target:
FESM (Fidelity Enhanced Small Cap ETF) has a solid overall rating, suggesting it holds a generally attractive mix of small-cap stocks with room for improvement. Strong contributors like EnerSys and HealthEquity support the fund’s quality through robust financial performance, positive earnings calls, and strategic growth initiatives, while names like Planet Labs and Guardant Health add growth potential but also bring risks tied to weak profitability and valuation concerns. The main risk factor is the fund’s focus on smaller companies, where high valuations, leverage, and operational challenges can make returns more volatile.
Positive Factors
Strong Recent Performance
The ETF has shown solid gains so far this year and in the last month, indicating positive recent momentum.
Leading Small-Cap Winners in Top Holdings
Several of the largest positions, such as Bloom Energy, Vicor, and Fabrinet, have delivered strong year-to-date results, helping drive the fund’s returns.
Broad Sector Diversification
Holdings spread across technology, industrials, health care, financials, and other sectors help reduce the impact of weakness in any single industry.
Negative Factors
Heavy U.S. Concentration
With the vast majority of assets in U.S. stocks and very little abroad, the fund is highly tied to the U.S. market’s fortunes.
Exposure to Underperforming Names
Some top holdings like Guardant Health and Commercial Metals have shown weak year-to-date performance, which can drag on overall returns.
Moderate Expense Ratio
The fund’s fee is not especially high but is above the cheapest index ETFs, slightly reducing net returns over time.

FESM vs. SPDR S&P 500 ETF (SPY)

FESM Summary

The Fidelity Enhanced Small Cap ETF (FESM) focuses on smaller U.S. companies and does not track a set index; instead, managers actively pick stocks. It spreads investments across many areas of the economy, with larger weights in technology, industrials, and health care. Well-known names in the fund include Bloom Energy and Lumen Technologies. Someone might invest in this ETF to seek long-term growth and diversify beyond large, familiar companies. However, small-company stocks can be more volatile, so the value of this ETF can go up and down more sharply than the overall market.
How much will it cost me?The Fidelity Enhanced Small Cap ETF (FESM) has an expense ratio of 0.28%, which means you’ll pay $2.80 per year for every $1,000 invested. This cost is slightly higher than average for ETFs because it uses an actively managed strategy to select small-cap stocks with strong growth potential. Active management typically involves more research and decision-making, which can increase costs.
What would affect this ETF?The Fidelity Enhanced Small Cap ETF (FESM) could benefit from economic growth and innovation in sectors like technology and health care, which make up a significant portion of its holdings. However, small-cap stocks are often more sensitive to economic downturns, interest rate hikes, and market volatility, which could negatively impact the ETF's performance. Additionally, its focus on U.S.-based companies means it may be affected by domestic regulatory changes or shifts in consumer demand.

FESM Top 10 Holdings

FESM’s story is all about U.S. small caps with a tech tilt, and a few names are clearly steering the ship. MaxLinear has been sprinting higher, giving the fund a strong boost despite its shaky fundamentals, while Vicor and Fabrinet are also rising steadily on solid growth, reinforcing the ETF’s technology-heavy lean. Bloom Energy and Credo add to that momentum, keeping the tech engine humming. On the flip side, Guardant Health has been losing steam and Commercial Metals looks mixed, modestly dragging on an otherwise upbeat, domestically focused portfolio.
Name
Company Name
Weight %
Market Value
Market Cap
Yearly Gain
Overall Rating
Bloom Energy1.99%$96.04M$65.28B1119.75%
62
Neutral
Credo Technology Group Holding Ltd1.53%$73.87M$35.98B319.38%
77
Outperform
Fabrinet1.32%$63.88M$25.80B237.27%
78
Outperform
Maxlinear1.18%$56.86M$5.40B408.87%
60
Neutral
Vicor0.85%$40.92M$12.41B421.27%
73
Outperform
EnerSys0.79%$37.97M$7.71B143.71%
79
Outperform
Lumen Technologies0.75%$36.06M$9.10B149.72%
55
Neutral
Guardant Health0.74%$35.77M$11.66B84.41%
61
Neutral
Commercial Metals Company0.74%$35.62M$7.67B57.13%
70
Neutral
StoneX Group0.72%$34.66M$8.35B81.44%
58
Neutral

FESM Technical Analysis

Technical Analysis Sentiment
Positive
Last Price
Price Trends
50DMA
39.62
Positive
100DMA
39.40
Positive
200DMA
37.39
Positive
Market Momentum
MACD
1.08
Negative
RSI
66.96
Neutral
STOCH
84.43
Negative
Evaluating momentum and price trends is crucial in ETF analysis to make informed investment decisions. For FESM, the sentiment is Positive. The current price of undefined is equal to the 20-day moving average (MA) of 40.87, equal to the 50-day MA of 39.62, and equal to the 200-day MA of 37.39, indicating a bullish trend. The MACD of 1.08 indicates Negative momentum. The RSI at 66.96 is Neutral, neither overbought nor oversold. The STOCH value of 84.43 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FESM.

FESM Peer Comparison

Comparison Results
Name
Price
Price Target
AUM
Expense Ratio
Overall Rating
$4.83B0.28%
65
Neutral
$9.12B0.68%
74
Outperform
$7.40B0.30%
68
Neutral
$2.67B0.25%
66
Neutral
$2.23B0.45%
67
Neutral
$1.97B0.38%
70
Neutral
Performance Comparison
Ticker
Company Name
Price
Change
% Change
FESM
Fidelity Enhanced Small Cap ETF
42.53
13.73
47.67%
SPYI
NEOS S&P 500 High Income ETF
DFSV
Dimensional US Small Cap Value ETF
AVSC
Avantis U.S Small Cap Equity ETF
BSVO
EA Bridgeway Omni Small-Cap Value ETF
PSC
Principal U.S. Small-Cap Multi-Factor ETF
Glossary
BuyAn ETF rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the ETF is likely to deliver higher returns compared to other ETFs in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldAn ETF rated as a "Hold" s expected to perform in line with the overall market or a specific benchmark. This rating indicates that the ETF is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellAn ETF rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the ETF may deliver lower returns compared to other ETFs in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
DisclaimerThis 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.Date of analysis: ―
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