FMDE vs VO

FMDECFidelity Enhanced Mid Cap ETF

VOAVanguard Morningstar Mid-Cap ETF

In short

FMDE A 2007-vintage Fidelity quant strategy that spent 16 years as a mutual fund, then reorganized into an ETF in 2023 at roughly half the old fee. Same multifactor machinery, aimed at the mid-cap tier.

VO The plain middle of the US market for three basis points. VO owns roughly 300 stocks sitting between the 70th and 85th percentile of investable market cap, each at index weight, with buffer bands that slow the churn at the edges.

Stated mandate

FMDE The fund seeks to outperform its benchmark through a quantitative investment process that balances risk and return. It uses multifactor statistical models to select companies with desirable fundamental characteristics.

VO The fund seeks to track the CRSP US Mid Cap Index by investing in its U.S. mid-cap stocks through passive, full replication.

Why people hold it

• FMDE The record predates the ticker. This strategy launched as a Fidelity Enhanced Index mutual fund in 2007 and was reorganized into an ETF in November 2023 with identical objective, policies and strategy.fidelity.comsec.gov
• Costs 0.23% a year, under the typical US multifactor equity fund, and the ETF conversion cut the fee roughly in half versus the mutual fund it replaced.fidelity.com
• Most multifactor shelves are stacked with large caps (VONV, VYM, IUSG). This one points valuation, growth and profitability screens at mid caps, holding roughly 300 of the Russell Midcap's ~800 names.sec.gov
• It arrived with the mutual fund's assets intact, now a multi-billion-dollar fund that trades actively, which tends to keep spreads narrow for ordinary retail-size orders.

• VO Costs 0.03% a year against a 0.15% median for mid-cap peers, matching SCHM as the cheapest in the group and undercutting IWR by a wide margin.
• Full replication, not sampling: it holds the index's roughly 300 names at index weight, and its tracking is among the tightest in the mid-cap group.vanguard.com
• Trading since 2004 as a share class of Vanguard's Mid-Cap Index Fund, it has grown into one of the largest and most actively traded mid-cap index funds.sec.gov
• CRSP draws the mid-cap line by percentage of market cap, not a fixed stock count, with buffer zones at the edges so companies migrate gradually rather than jumping buckets.crsp.orgbogleheads.org

Worth knowing

• FMDE Active quant, not index replication. Managers can own names outside the Russell Midcap and tilt weights, so results diverge from the benchmark in both directions.sec.gov
• Mid-cap territory brings its own weather: Fidelity's own disclosures note medium-size issuers can be more volatile than larger ones and can perform unlike the broad market.fidelity.com
• Distributions land quarterly and fall out of a capital-appreciation mandate, not a yield target.sec.gov

• VO Mid caps move harder than blue chips, and Vanguard flags that: the fund sits at the top of its own 1-to-5 risk scale.vanguard.com
• One band of the market by design. No mega caps, no small caps, so it covers the middle rather than the whole US market.crsp.org
• About 300 stocks is a narrower net than a total-market fund casts, and sector weights are simply whatever the middle of the market looks like at the time.

Full FMDE profile⁠

Full VO profile⁠