Fidelity’s already expansive lineup of exchange traded funds (ETFs) was boosted on Thursday when the asset manager added four mid- and small-cap funds to its stable.
The freshly minted quartet adds to the issuer’s Enhanced ETF suite, launched in 2023. Some the established, well-known ETFs in that group include the $6.5 billion Fidelity Enhanced Large-Cap Core ETF (FELC), among others.
The quartet of additions to the issuer’s Enhanced ETF stable are the Fidelity Enhanced Mid Cap Growth ETF (FEMG), Fidelity Enhanced Mid Cap Value ETF (FEMV), Fidelity Enhanced Small Cap Growth ETF (FSEG), and Fidelity Enhanced Small Cap Value ETF (FSEV) – all of which are actively managed.
While these are new ETFs, Fidelity clients, including advisors that custody with the firm, can trade the funds commission-free and advisors may want to evaluate the quarter because smaller and value stocks are showing signs of life this year.
Examining the Enhanced Enhancements
As advisors know, mid-cap stocks are often overlooked relative to larger and smaller peers, but the Fidelity Enhanced Mid Cap Growth ETF and the Fidelity Enhanced Mid Cap Value ETF may prove to be well-timed new ETFs because in predictably quiet fashion, mid-cap equities are soaring this year.
As of April 29 the S&P MidCap 400 Index and its growth and value offshoots were soundly outpacing the large-cap S&P 500 since the start of 2026. Additionally, there’s a case for active management with this asset class.
Many basic mid-cap indexes and funds aren’t tech-heavy, the companies populating those funds are big-time artificial intelligence (AI) adopters. Due to their smaller size, mid-market corporations can be rapid deployers of AI, potentially giving them long-term legs up. Mid-caps are also solid ideas for quelling concentration risk, which in this case references professional and retail investors’ favoritism of larger stocks is prompting them to gloss over mid-caps, possibly creating opportunity in the process. Perhaps best of all is the point that mid-caps aren’t demanding on valuation, confirming investors don’t have to pay-up to access this segment’s perks.
As for the Fidelity Enhanced Small Cap Growth ETF and the Fidelity Enhanced Small Cap Value ETF, that duo could also potentially gain traction out of the gates because after lengthy spells of frustrating advisors and clients, small-cap stocks are roaring back. Year-to-date, the S&P SmallCap 600 Index and its growth and value counterparts are each higher by at least 12%.
Fair Fees, Deep Management Bench
There’s a low-cost passive mid- and small-cap ETFs on the market today, but these are corners of the equity market where active managers can add considerable value and in some cases, that’s worth paying up for. That said, the new Fidelity Enhanced ETFs are fairly priced, particularly when measured the broader universe of active style funds addressing smaller stocks.
“The new ETFs employ team-based portfolio management including experienced co-managers Anna Lester, George Liu, and Shashi Naik alongside a team of dedicated quantitative researchers,” according to the issuer. “The products are competitively priced with a gross expense ratio of 0.23% for FEMG and FEMV, and 0.28% for FSEG and FSEV.”
Not to be overlooked are the potential advantages that could accrue to the new ETFs by way of ties to Fidelity’s Quantitative Research and Investments unit.
“Fidelity’s Quantitative Research and Investments is an integrated division of more than 250 quants, data-scientists and technologists within Asset Management that unites decades of proprietary data, advanced systematic approaches, and expert human insight to help uncover opportunity for clients,” adds the Boston-based asset manager.
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