FSMD ETF

Lower interest rates are likely to enhance the prospects for small and mid-cap stocks, which makes FSMD a good investment choice right now. FSMD uses a multifactor strategy that has provided better returns and less volatility than benchmarks such as the S&P MidCap 400 and Russell 2000 indices. With a diversified portfolio and a reasonable P/E ratio of 16.0x, FSMD stands out among small and mid-cap ETFs.

Passively managed FSMD applies a multifactor approach to small- and mid-cap stocks. The factors amalgamated are value, quality, low volatility, and momentum. The current iteration of the FSMD portfolio features chiefly mid-cap stocks with healthy value characteristics. Industrials and financials are the top sectors. Quality is mostly adequate, yet there are weaknesses on the capital efficiency front.

Fidelity Small-Mid Multifactor ETF offers a twist on market-cap weighted indexing with a multifactor, rules-based approach. The FSMD fund is well-diversified with nearly 600 holdings and attractive valuations. FSMD's emphasis on small- and mid-cap companies and its quality and momentum screens make it a potential outperformer with lower risk.