Fidelity launches four Beta-Plus ETFs for mid and small caps

Fidelity introduced four systematic “Beta-Plus” Enhanced ETFs at the end of April: Fidelity Enhanced Mid Cap Growth ETF (FEMG), Fidelity Enhanced Mid Cap Value ETF (FEMV), Fidelity Enhanced Small Cap Growth ETF (FSEG) and Fidelity Enhanced Small Cap Value ETF (FSEV).

The funds apply quantitative, rules-based models designed to modestly outperform standard benchmarks while keeping sector exposure and volatility close to index behavior. Fidelity targets a tracking error typically around 1% to 2% for these ETFs.

Fidelity positions the ETFs as core index-replacement tools that provide incremental active exposure without large deviations from benchmark weights. Portfolio managers follow objective rules and integrated risk controls to limit sector and volatility drift.

Fidelity says the funds use a proprietary security-selection model refined over about 15 years and applied systematically rather than through full index replication. The process includes active factor tilts toward valuation, growth and quality.

The Enhanced lineup complements Fidelity’s Fundamental ETF suite, which uses a bottom-up active process and can produce higher tracking error and greater divergence from index weights. Examples of that approach include the Fidelity Fundamental Large Cap Core ETF (FFLC) and the Fidelity Fundamental Small-Mid Cap ETF (FFSM).

Established Enhanced funds such as the Fidelity Enhanced International ETF (FENI), Fidelity Enhanced Mid Cap ETF (FMDE) and Fidelity Enhanced Small Cap ETF (FESM) each recorded more than $1 billion in net inflows in 2026.

Greg Friedman, head of ETF Management and Strategy at Fidelity, commented that the new listings expand the firm’s style-box options and that the rules-based approach has offered a low-risk entry point to active management.