Fidelity Magellan ETF (FMAG US) - Portfolio Construction Methodology

Core Insights - The Fidelity Magellan ETF (FMAG US) employs a bottom-up fundamental research approach focusing on U.S. large- and mid-cap equities while allowing for opportunistic non-U.S. investments when conditions permit [1] Investment Process - The investment process emphasizes durable growth drivers, unit economics, competitive positioning, balance-sheet resilience, and management capital allocation [1] - Analysts integrate price-to-intrinsic-value assessments and variant-perception catalysts into their evaluations [1] Portfolio Construction - Portfolio construction focuses on issuer-level conviction sizing with diversification across industries and business models [1] - Liquidity screens and trading cost estimates are utilized to calibrate entry and exit points [1] Risk Management - Risk is managed through continuous thesis validation, downside-case appraisal, and monitoring of factor and sector concentrations relative to intended exposures [1] - Derivatives may be employed for efficient market exposure or to implement hedges [1] Rebalancing Strategy - Rebalancing is continuous and event-driven, involving trimming positions as valuations converge, theses deteriorate, or better risk-adjusted ideas arise [1]