VIDEO: ETF of the Week: FESM | ETF TrendsETF Trends is now VettaFi. Read More --On this episode of the "ETF of the Week†podcast, VettaFi's Head of Research, Todd Rosenbluth, discussed the [Fidelity Enhanced Small Cap ETF (FESM)] with Chuck Jaffe of Money Life. The pair discussed several topics related to the fund to give investors a deeper understanding of the ETF. Chuck Jaffe: One fund, on point for today. The expert to talk about it. Welcome to the ETF of the Week!Welcome to the ETF of the Week, where we ...

ETF of the Week: Fidelity Enhanced Small Cap ETF (FESM)ETF Trends is now VettaFi. Read More -- VettaFi's Head of Research Todd Rosenbluth discussed the [Fidelity Enhanced Small Cap ETF (FESM)] on this week's "ETF of the Week†podcast with Chuck Jaffe of "Money Life.†For more news, information, and strategy, visit the [ETF Investing Content Hub].[chuck jaffe] [etf of the week] [expert insights] [FESM] [Fidelity] [podcast] [todd rosenbluth]## Earn free CE credits and discover new strategiesLoad More ...

Core Insights - The Fidelity Enhanced Small Cap ETF (FESM) employs multi-factor strategies focused on small-cap stocks with a growth tilt, which has contributed to its outperformance compared to the Russell 2000 and its peers [1] Group 1 - FESM is designed to follow multi-factor strategies specifically for small-cap stocks [1] - The fund's growth tilt has been a significant factor in its ability to outperform the Russell 2000 index [1]

Group 1 - Fidelity Enhanced Small Cap ETF (FESM) is an actively managed fund launched on December 20, 2007, and listed as an ETF in November 2023 [1] - Historical prices for FESM are available from November 20, 2023, at data providers [1] - Fred Piard, PhD, is a quantitative analyst with over 30 years of experience in technology and has been investing in data-driven systematic strategies since 2010 [1] Group 2 - Fred Piard runs the investing group Quantitative Risk & Value, focusing on quality dividend stocks and companies at the forefront of tech innovation [1] - The group also provides market risk indicators, a real estate strategy, a bond strategy, and an income strategy in closed-end funds [1]

Core Viewpoint - Small-cap U.S. stocks are showing signs of a potential comeback after a prolonged period of underperformance, with recent data indicating positive trends for investors in this segment [1] Group 1: Market Performance - The iShares Russell 2000 ETF (IWM) has gained approximately 28% over the past six months, outperforming the SPDR S&P 500 ETF Trust (SPY), which saw a 23% increase [1] - The Russell 2000 index surpassed the 2,500 mark for the first time, indicating a significant milestone for small-cap stocks [1] Group 2: Economic Factors - Early-year weakness in small-cap stocks was largely attributed to President Trump's announcement of higher tariffs, which adversely affected smaller companies [2] - The annual inflation rate in the U.S. rose to 3% in September 2025, up from 2.9% in August, which may influence the Federal Reserve's monetary policy [3] - The Federal Reserve has already implemented its first rate cut of 2025 and is expected to consider additional cuts, which could benefit small-cap stocks [4][5] Group 3: Trade Relations - Recent easing of trade tensions, including potential trade deals with China and India, may provide a favorable environment for small-cap stocks [6] Group 4: Valuation Metrics - The Russell 2000 is currently trading at a P/E ratio of 34.32, an increase from 29.87 a year ago, indicating that small-cap stocks are not necessarily undervalued [7] - In comparison, the Nasdaq 100 Index has a P/E ratio of 33.25, while the S&P 500 Index stands at 25.58, suggesting that small caps are relatively more expensive [8] Group 5: Top Performing Small-Cap ETFs - Fidelity Enhanced Small Cap ETF (FESM) has shown a six-month performance increase of 31.49% with an AUM of $2.85 billion [10] - Vanguard Russell 2000 ETF (VTWO) has increased by 29.4% over six months, with an AUM of $13.3 billion [10] - Other notable ETFs include Federated Hermes MDT Small Cap Core ETF (FSCC) with a 31.7% increase and Global X Russell 2000 ETF (RSSL) with a 29.2% increase [11]