FFSM ETF: What Is It? A Complete Guide to Returns, Expense Ratio, Holdings, and Alternative ETFs
An actively managed ETF that concentrates on high-quality US small- and mid-cap stocks, built on Fidelity's in-depth fundamental research.
SubscribeWhat Is This ETF?
This is an actively managed product in which Fidelity's portfolio managers assemble their preferred stocks within the small- and mid-cap range. Its main investment universe is companies with market capitalizations similar to those in the Russell 2500 Index.
Through professional active management, it suits investors who want differentiated performance in the US small- and mid-cap market.
Fidelity launched this ETF in 2024, and it uses an active management approach.
How Does It Invest?
| Item | Details |
|---|---|
| Tracking Index | Russell 2500 Index (reference) |
| Management Style | Active (fundamental analysis) |
| Rebalancing Frequency | As needed (active management) |
| Dividend Frequency | Quarterly |
| Expense Ratio | 0.43% |
The fund analyzes a range of fundamental indicators, including profitability, value, and growth, to select roughly 200 or more promising small- and mid-cap stocks. It combines the managers' expertise with quantitative models to carefully manage exposure to each holding.
- Draws on Fidelity's extensive research capabilities
- Active management that takes advantage of inefficiencies in the small- and mid-cap market
Size and Costs
Assets under management (AUM) stand at $1.5B, and the expense ratio is 0.43% per year.
Unlike passive ETFs that simply track an index, this fund involves active manager judgment, so its performance may follow a different path from typical small- and mid-cap index ETFs such as VBR and IWM.
Performance and Trends
1-Year Price Performance
Dividend & Yield
52-Week Price RangeThe fund responds sensitively to a recovery in the US domestic economy and to changes in the interest rate environment. It tends to show relative strength especially in periods when earnings-based stock selection stands out.
Inflows have been notable during rotations into the small- and mid-cap sector, and interest from investors seeking alpha through active management, along with asset allocation demand, remains steady.
Strengths and Weaknesses
Fidelity's professional stock selection lets investors participate in small- and mid-cap growth, but volatility is higher than the index and fees are somewhat elevated.
💪 Key Strengths
⚠️ Points to Watch
Alternative ETFs and Related Products
VIG, SCHD, and VYM shown in the table are large-cap-focused dividend and value ETFs, with lower fee levels and steadier performance than FFSM. On the other hand, if you want to focus on the small- and mid-cap market, direct alternatives include IWM (Russell 2000) and IJR (S&P 600). To strengthen a value tilt, VBR may be suitable, and for mid-cap-focused exposure, MDY could be an appropriate choice.
Peer Comparison ETFs| Ticker | Name | Price | Change | AUM | Total Expense Ratio | Dividend Yield | 1Y |
|---|---|---|---|---|---|---|---|
 SCHD | Schwab US Dividend Equity ETF | $35.27 | -0.4% | $118.9B | 0.06% | 2.99% | +30.5% |
 VIG | Vanguard Dividend Appreciation FTF | $243.12 | -0.8% | $114.5B | 0.04% | 1.5% | +12.0% |
 VYM | Vanguard High Dividend Yield Indx ETF | $161.50 | -0.7% | $82.7B | 0.04% | 2.28% | +14.6% |
 DFAC | U.S. Core Equity 2 Portfolio-ETF Class Shares | $44.74 | -0.6% | $49.3B | 0.18% | 0.88% | +15.4% |
 RDVY | First Trust Rising Dividend Achievers ETF | $78.70 | -1.2% | $25.5B | 0.47% | 0.86% | +16.8% |
Top Holdings| Ticker | Name | Weight | Price | Change | Market Cap | P/E | Dividend Yield |
|---|---|---|---|---|---|---|---|
| GILD | Gilead Sciences Inc | - | $156.04 | -0.7% | $193.5B | - | 2.11% |
| LITE | Lumentum Holdings Inc | 0.02% | $756.17 | +0.5% | $68.5B | - | - |
 FN | Fabrinet | 0.02% | $314.94 | -0.9% | $11.3B | 24.1 | - |
| FTI | TechnipFMC plc | 0.02% | $69.89 | +4.6% | $27.4B | 24.4 | 0.29% |
 IESC | IES Holdings Inc | 0.04% | $213.54 | -3.3% | $8.6B | 19.0 | - |
| FIX | Comfort Systems USA Inc | 0.02% | $1160.86 | -9.3% | $40.9B | 25.1 | 0.28% |
 AEIS | Advanced Energy Industries Inc | 0.02% | $216.63 | +0.0% | $8.7B | 40.4 | 0.14% |
 ATI | ATI Inc | 0.02% | $156.88 | -3.1% | $21.4B | 45.9 | - |
 SNX | TD Synnex Corp | 0.02% | $247.34 | +0.1% | $19.7B | 15.1 | 0.78% |
Investor Checkpoints
Here is a key checklist to review before investing in FFSM. Please weigh the distinctive volatility of the small- and mid-cap market and the pros and cons of Fidelity's active management strategy, and confirm that the fund fits your investment goals.
| Checkpoint | What to Check | Current Status |
|---|---|---|
| 📊 Active Performance | Continuously monitor whether it delivers excess returns over the index | Needs review |
| 💵 Fee Level | Check the cost structure against passive small- and mid-cap ETFs | Somewhat high |
| 🏢 Holdings Composition | Check for sector and style concentration within small- and mid-caps | Adequately diversified |
| 📈 Market Environment | Check whether interest rates and the economic cycle favor small- and mid-caps | Volatility to consider |
The small- and mid-cap sector can suffer from low liquidity and vulnerability to external changes. If the active strategy falls out of favor with the market, it could lag the index for an extended period.
It is an efficient alternative for those who want to invest in the US small- and mid-cap market with confidence in Fidelity's research capabilities. It is worth considering as part of a strategy that pursues alpha over the long term.
SubscribeDisclaimer: This content is for informational purposes only and does not constitute investment advice. All investment responsibility lies with the investor.
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