FESM - ETF AI Analysis

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Fidelity Enhanced Small Cap ETF (FESM)

Rating:65Neutral

Price Target:―

FESM’s rating suggests it is a reasonably solid small-cap ETF, supported by strong holdings like EnerSys, Sanmina, Fabrinet, and Credo Technology Group, which benefit from robust financial performance, positive earnings calls, and generally favorable technical trends. The fund is held back somewhat by names like Guardant Health and Compass, where financial instability, profitability challenges, and valuation concerns introduce more risk. A key risk factor is exposure to several companies with high P/E ratios and operational or cash flow challenges, which can make the ETF more sensitive to market volatility and changing investor sentiment.

Positive Factors

Strong Recent Performance

The ETF has shown solid gains over the past month, three months, and year-to-date, indicating positive recent momentum.

Leading Holdings Performing Well

Several of the top positions, such as Bloom Energy and Hecla Mining, have delivered strong year-to-date results that support the fund’s overall performance.

Broad Sector Diversification

Holdings spread across many sectors, including technology, industrials, health care, and financials, help reduce the impact of weakness in any single industry.

Negative Factors

High U.S. Market Concentration

With the vast majority of assets in U.S. stocks, the fund is heavily tied to the performance of the U.S. market and offers very limited international diversification.

Small-Cap Volatility Risk

Because the ETF focuses on small-cap companies, investors should expect more price swings and sensitivity to economic changes than with large-cap funds.

Moderate Expense Ratio

The fund’s expense ratio is not especially low for an ETF, which slightly reduces the net return investors keep over time.

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

AUM4.03B

RegionNorth America

Expense Ratio0.28%

Beta1.10

IssuerFidelity

Inception DateNov 20, 2023

Dividend Yield0.78%

Asset ClassEquity

Index TrackedNo Underlying Index

Share Statistics

EPS (TTM)N/A

Shares OutstandingN/A

10 Day Avg. Volume856,140

30 Day Avg. Volume595,697

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)N/A

P/FCF RatioN/A

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

48.64

Price Target Upside― Downside

Rating ConsensusModerate Buy

Number of Analyst Covering583

EPS Forecast (FY)N/A

Revenue Forecast (FY)N/A

FESM Summary

The Fidelity Enhanced Small Cap ETF (FESM) invests mainly in smaller U.S. companies across many sectors, including technology, industrials, and health care. It does not track a set index, but instead uses research to pick individual small-cap stocks it believes have strong growth potential. Well-known names in the fund include Bloom Energy and Hecla Mining. Someone might consider this ETF to seek higher long-term growth and to diversify beyond large, well-known companies. A key risk is that small-cap stocks can be very volatile, so the ETF’s value can rise and fall 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 nimble U.S. small caps, with a noticeable tilt toward tech, industrials, and health care. Bloom Energy is one of the fund’s key engines right now, rising on solid growth hopes despite some valuation worries. Mining names like Hecla and Coeur have also been climbing, giving the portfolio a lift from the materials side. On the steadier front, Fabrinet and Credo are humming along, while turnaround plays like Compass and Guardant Health add some drama, occasionally tugging at returns when profitability concerns resurface.

Name	Company Name	Weight %	Market Value	Market Cap	Yearly Gain	Overall Rating
BE	Bloom Energy	1.42%	$57.39M	$43.64B	447.15%	62 Neutral
CRDO	Credo Technology Group Holding Ltd	1.07%	$43.19M	$23.19B	81.61%	77 Outperform
CDE	Coeur Mining	1.01%	$40.69M	$14.82B	216.79%	69 Neutral
FN	Fabrinet	0.96%	$38.70M	$16.68B	107.16%	78 Outperform
HL	Hecla Mining Company	0.93%	$37.39M	$15.87B	284.01%	74 Outperform
GH	Guardant Health	0.91%	$36.71M	$13.92B	113.55%	61 Neutral
CMC	Commercial Metals Company	0.84%	$33.85M	$9.23B	51.92%	70 Neutral
ENS	EnerSys	0.72%	$29.25M	$6.52B	82.38%	79 Outperform
OPCH	Option Care Health	0.71%	$28.55M	$5.50B	9.44%	73 Outperform
LTH	Life Time Group Holdings	0.68%	$27.42M	$6.55B	-8.16%	71 Outperform

FESM Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price―

Price Trends

50DMA

39.21

Positive

100DMA

37.95

Positive

200DMA

35.20

Positive

Market Momentum

MACD

0.25

Positive

RSI

47.92

Neutral

STOCH

64.93

Neutral

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 undefined is equal to the 20-day moving average (MA) of 40.17, equal to the 50-day MA of 39.21, and equal to the 200-day MA of 35.20, indicating a neutral trend. The MACD of 0.25 indicates Positive momentum. The RSI at 47.92 is Neutral, neither overbought nor oversold. The STOCH value of 64.93 is Neutral, 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	―	―	$4.03B	0.28%	―
CGUS	―	―	$8.84B	0.33%	―
DFSV	―	―	$7.10B	0.30%	―
AVSC	―	―	$2.38B	0.25%	―
BSVO	―	―	$2.09B	0.45%	―
PSC	―	―	$1.80B	0.38%	―

Performance Comparison

FESM

Fidelity Enhanced Small Cap ETF

39.57

6.20

18.58%

CGUS

Capital Group Core Equity 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.

Disclaimer

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.Date of analysis: ―

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