BKSE vs FDM

BKSEABNY Mellon US Small Cap Core Equity ETF

FDMCFirst Trust Dow Jones Select MicroCap Index Fund

In short

BKSE Small-cap indexing stripped to 0.04% a year, a fraction of what the typical fund in the category charges. About 600 US small caps, Morningstar's index, and a lot less name recognition than the household tickers.

FDM Micro-cap, but screened. FDM's index starts with the US total market and keeps only the tiny companies that clear size, liquidity and fundamental tests. Running since 2005, at 0.60% net of a waiver through April 30, 2027.

Stated mandate

BKSE The fund seeks to mirror the performance of the Morningstar US Small Cap Index. It normally invests nearly all assets in the index’s equity securities.

FDM The fund seeks to track, before fees and expenses, the price and yield of the Dow Jones Select Microcap Index.

Why people hold it

• BKSE A 0.04% expense ratio sits in the cheapest tier of US small-cap index funds, well under iShares' IWM at 0.19% and a hair off Vanguard's VB and Schwab's SCHA at 0.03%.
• Roughly 600 holdings across the Morningstar US Small Cap Index, so no single name drives the fund.
• Straight index mandate: nearly all assets go into the index's own stocks, and it has been one of the tightest-tracking implementations in its peer group.
• Pays distributions quarterly, on the standard schedule for a broad equity index fund.

• FDM The index is a filter, not a dragnet: it pulls from the Dow Jones US Total Stock Market universe and keeps only micro caps meeting size, liquidity and fundamental eligibility criteria.spglobal.com
• Listed in September 2005, one of the longest-tenured micro-cap index ETFs around, with a methodology that has been doing the same job through multiple market cycles.ftportfolios.com
• Roughly 140 stocks, so this is a diversified basket of micro caps rather than a few concentrated bets. Normally at least 90% of assets sit in actual index constituents.ftportfolios.com
• Cash comes back on a quarterly schedule, which is not a given in a corner of the market full of companies that pay nothing.

Worth knowing

• BKSE Thinly traded and smaller than the category's household names, so bid-ask spreads can be wider and sizeable orders take more care at the screen.
• Launched in 2020, a shorter live record than small-cap funds that have run through several full market cycles.
• Small-cap stocks swing harder than large caps, and this fund holds the index as it comes with no defensive tilt.

• FDM Screening costs money: 0.60% net of a waiver through April 30, 2027 (0.65% gross), above the category median. Plain small-cap trackers like SCHA and VB charge 0.03%.
• Thinly traded next to the giant small-cap funds, so bid-ask spreads can widen and sizeable orders deserve a careful look at the quote before they go in.
• Micro caps are the volatile end of US equities. The fundamental screens narrow the list; they do not soften the ride, and the fund stays fully invested in the index.spglobal.com

Full BKSE profile⁠

Full FDM profile⁠