FESM vs SSCP

FESMAFidelity Enhanced Small Cap ETF

SSCPDSMART Small Cap ETF

In short

FESM A quant small-cap strategy that has been running since 2007 and moved into an ETF wrapper in 2023 with the same mandate. It nudges the Russell 2000 rather than copying it, and charges far less than the typical active small-cap fund.

SSCP A 2026-vintage active small-cap fund with an unusually wide passport: it can own U.S. and international small caps, as long as the shares list on a U.S. exchange. Stock picking with a growth lean, not index ownership.

Stated mandate

FESM The fund is a diversified U.S. equity strategy focused on small-cap companies. It seeks to outperform its benchmark through a quantitative process that balances risk and return.

SSCP The fund is actively managed and invests primarily in equity securities of U.S. and international small-capitalization companies whose shares are listed on U.S. exchanges.

Why people hold it

• FESM Costs 0.28% a year, roughly half the median for active US small-cap ETFs. Cheap fuel for a strategy that only needs to beat its benchmark by a little.
• The strategy dates to 2007 as a Fidelity mutual fund and kept the same objective when it converted to an ETF in 2023. Long history, newer ticker.fidelity.com
• A multi-billion-dollar fund that trades actively, so getting in and out tends to be straightforward. One of the stronger builds in the active small-cap group.
• Spreads across roughly 600 small-cap names, so no single blowup dominates. This is a diversified core sleeve, not a concentrated stock-picker bet.

• SSCP Active by design: a sub-adviser runs a growth-oriented selection process instead of buying the small-cap index wholesale.
• The passport is wide. U.S. and international small caps both qualify, provided the shares list on a U.S. exchange, so foreign names arrive without offshore settlement.
• Plain plumbing: a registered 1940 Act ETF whose mandate centers on equity securities, not swaps or notes.

Worth knowing

• FESM Small caps are the choppiest corner of the US market, and this fund lives there full time. Expect a bumpier ride than a large-cap core holding.fidelity.com
• Enhanced index means small tilts around the Russell 2000, not a break from it. Results track close to the index rather than looking dramatically different.fidelity.com
• Cheap, but not the cheapest in the room: top-rated peers AVSC and AVUV run 0.25% and DUHP 0.20%.

• SSCP The fee is 0.79% a year, above the median for active small-cap ETFs. Systematic peers such as AVSC (0.25%) and DFSV (0.30%) charge a fraction of that.
• It launched in 2026 and starts from a small asset base, so the record is short and trading can be light. Check the spread before placing an order.
• No declared index sits behind it, so outcomes ride on the sub-adviser's picks rather than a published rules-based recipe.

Full FESM profile⁠

Full SSCP profile⁠