Investing Port

The Fidelity Small-Mid Factor ETF (FSMD) is one of a handful of funds that offers exposure to small- and mid-cap U.S. stocks, an asset class that can make up a significant slice of many long-term portfolios. FSMD targets companies with attractive valuations, high quality profiles, positive momentum, and lower volatility than the broader market. This ETF may be appealing both to those in the asset allocation business, and to buy-and-hold investors who already maintain large cap exposure through something like an S&P 500 fund. Many funds focus exclusively on small- or mid-cap stocks, making FSMD a convenient one-stop-shop for those looking to invest in the bottom slice of the size spectrum. While FSMD owns hundreds of stocks, it has a shallower portfolio than either the iShares Russell 2500 ETF (SMMD) or the Vanguard Extended Market ETF (VXF). FSMD is reasonably priced for a factor ETF, but VXF offers more diversification and better liquidity at a fraction of the price.