As volatility rises, it’s hard not to look to investments that can help diversify portfolios. Even ahead of recent market events, significant concentration risk loomed as markets relied heavily on just a handful of firms. While the start of 2025 has not provided the rate cuts that may have helped rocket midcaps into prominence, midcap investing can still provide a strong set of options.
See more: Don’t Overlook Midcap Firms in Enhanced Midcap ETF FMDE
The Fidelity Enhanced Mid Cap ETF (FMDE ) can potentially fill that role for investors. The midcap investing ETF, which charges a 23 basis point fee, actively invests in midcap firms. FMDE leans on quantitative analysis, evaluating growth, profitability, and historical valuation in addition to other long-term return drivers identified by the Fund’s research driven approach.
Active Midcap ETF Investing in FMDE
That quantitative, active approach can help the fund find the strongest contenders in the midcap space. Given that midcap firms may be potentially more vulnerable to market uncertainty and volatility, selecting firms with attractive metrics within a risk managed portfolio can help.
In terms of upside, the midcap investing ETF can also lean on its research and active approach to find those standouts. Even with global volatility potentially on the horizon, midcap names can still provide a big source of growth in that satellite role.
FMDE has returned 27.64% over one year, per Fidelity Investments data, as of January 31. That has helped the fund outperform its benchmark index, the Russell Midcap Total Return U.S. Index, in that time frame. According to data from YCharts, FMDE’s price sat above its 50 and 200-day simple moving averages (SMAs) as of February 21, indicating a buy signal.
Compared to small caps, midcap firms can offer a steady combination of healthy balance sheets and growth potential. With an active approach, FMDE could be poised to help investors join a growing movement into active ETFs.
For more news, information, and analysis, visit the ETF Investing Channel.
Fidelity Investments® is an independent company unaffiliated with VettaFi LLC (“VettaFi”). These articles do not form any kind of legal partnership, agency affiliation, or similar relationship between VettaFi and Fidelity Investments, nor is such a relationship created or implied by the articles herein. VettaFi LLC is the author and owner of these articles.
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