FHLC vs. FESM

Last updated Jun 4, 2026

FHLC (Fidelity MSCI Health Care Index ETF) and FESM (Fidelity Enhanced Small Cap ETF) are both exchange-traded funds - FHLC is a Health & Biotech Equities fund tracking the MSCI USA IMI Health Care Index, while FESM is a Small Cap Blend Equities fund actively managed by Fidelity. FHLC is passively managed, while FESM is actively managed. Over the past year, FHLC returned 14.43% vs 46.73% for FESM. A 0.50 correlation means they provide meaningful diversification when combined. FHLC charges 0.08%/yr vs 0.28%/yr for FESM.

Performance

FHLC vs. FESM - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Fidelity MSCI Health Care Index ETF (FHLC) and Fidelity Enhanced Small Cap ETF (FESM). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, FHLC achieves a -3.90% return, which is significantly lower than FESM's 19.64% return.

FHLC

• 1D: 0.82%
• 1M: 1.50%
• YTD: -3.90%
• 6M: -4.11%
• 1Y: 14.43%
• 3Y*: 6.14%
• 5Y*: 4.50%
• 10Y*: 9.14%

FESM

• 1D: -1.51%
• 1M: 3.13%
• YTD: 19.64%
• 6M: 19.11%
• 1Y: 46.73%
• 3Y*: —
• 5Y*: —
• 10Y*: —

*Multi-year figures are annualized to reflect compound growth (CAGR)

FHLC vs. FESM - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023
FHLC Fidelity MSCI Health Care Index ETF	-3.90%	15.42%	2.48%	7.25%
FESM Fidelity Enhanced Small Cap ETF	19.64%	17.88%	16.22%	12.19%

Correlation

The correlation between FHLC and FESM is 0.43, which is low. Their price movements are largely independent, making them effective diversification partners.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.43
Correlation (All Time) Calculated using the full available price history since Nov 21, 2023	0.50

The correlation between FHLC and FESM has been stable across timeframes, ranging from 0.43 to 0.50 - a consistent structural relationship.

FHLC vs. FESM - Sectors Allocation Comparison

Sectors	FHLC	FESM
Healthcare	99.6%	15.7%
Financial Services	0.1%	14.8%
Technology	0.0%	21.6%
Industrials	0.0%	19.1%
Basic Materials	-	3.5%
Communication Services	-	3.1%
Consumer Cyclical	-	7.4%
Consumer Defensive	-	1.4%
Energy	-	7.2%
Real Estate	-	4.2%
Utilities	-	2.0%

Return for Risk

FHLC vs. FESM — Risk / Return Rank

Compare risk-adjusted metric ranks to identify better-performing investments over the past 12 months.

FHLC

FHLC Risk / Return Rank: 27
FHLC Sharpe Ratio Rank: 27
FHLC Sortino Ratio Rank: 29
FHLC Omega Ratio Rank: 26
FHLC Calmar Ratio Rank: 28
FHLC Martin Ratio Rank: 26

FESM

FESM Risk / Return Rank: 76
FESM Sharpe Ratio Rank: 75
FESM Sortino Ratio Rank: 72
FESM Omega Ratio Rank: 66
FESM Calmar Ratio Rank: 84
FESM Martin Ratio Rank: 82

The rank (0–100) shows how this investment's returns compare to the risk taken. Higher = better. Based on the past 12 months of data, combining Sharpe, Sortino, and other metrics used by quantitative funds and institutional investors.

FHLC vs. FESM - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Fidelity MSCI Health Care Index ETF (FHLC) and Fidelity Enhanced Small Cap ETF (FESM). Risk-adjusted metrics are performance indicators that assess an investment's returns in relation to its risk, enabling a more accurate comparison of different investment options.

	FHLC	FESM	Difference
Sharpe ratio: Return per unit of total volatility	1.01	2.48	-1.47
Sortino ratio: Return per unit of downside risk	1.58	3.34	-1.76
Omega ratio: Gain probability vs. loss probability	1.18	1.41	-0.23
Calmar ratio: Return relative to maximum drawdown	1.40	4.61	-3.21
Martin ratio: Return relative to average drawdown	3.52	16.60	-13.08
Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month.

FHLC vs. FESM - Sharpe Ratio Comparison

The current FHLC Sharpe Ratio is 1.01, which is lower than the FESM Sharpe Ratio of 2.48. The chart below compares the historical Sharpe Ratios of FHLC and FESM, calculated using daily returns over the previous 12 months. A higher Sharpe Ratio indicates better risk-adjusted performance relative to the risk-free rate.

Sharpe Ratios by Period

	FHLC	FESM	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	1.01	2.48	-1.47
Sharpe Ratio (5Y) Calculated over the trailing 5-year period	0.30	—	—
Sharpe Ratio (10Y) Calculated over the trailing 10-year period	0.55	—	—
Sharpe Ratio (All Time) Calculated using the full available price history	0.61	1.29	-0.68

Drawdowns

FHLC vs. FESM - Drawdown Comparison

The maximum FHLC drawdown since its inception was -28.76%, which is greater than FESM's maximum drawdown of -26.93%. Use the drawdown chart below to compare losses from any high point for FHLC and FESM.

Drawdown Indicators

	FHLC	FESM	Difference
Max Drawdown Largest peak-to-trough decline	-28.76%	-26.93%	-1.83%
Max Drawdown (1Y) Largest decline over 1 year	-10.38%	-10.18%	-0.20%
Max Drawdown (3Y) Largest decline over 3 years	-16.87%	—	—
Max Drawdown (5Y) Largest decline over 5 years	-17.73%	—	—
Max Drawdown (10Y) Largest decline over 10 years	-28.76%	—	—
Current Drawdown Current decline from peak	-6.96%	-1.59%	-5.37%
Average Drawdown Average peak-to-trough decline	-5.19%	-4.79%	-0.40%
Ulcer Index Depth and duration of drawdowns from previous peaks	4.11%	2.82%	+1.29%

Volatility

FHLC vs. FESM - Volatility Comparison

The current volatility for Fidelity MSCI Health Care Index ETF (FHLC) is 4.05%, while Fidelity Enhanced Small Cap ETF (FESM) has a volatility of 5.64%. This indicates that FHLC experiences smaller price fluctuations and is considered to be less risky than FESM based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	FHLC	FESM	Difference
Volatility (1M) Calculated over the trailing 1-month period	4.05%	5.64%	-1.59%
Volatility (6M) Calculated over the trailing 6-month period	10.11%	13.32%	-3.21%
Volatility (1Y) Calculated over the trailing 1-year period	14.33%	18.98%	-4.65%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	14.97%	21.26%	-6.29%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	16.81%	21.26%	-4.45%

FHLC vs. FESM - Expense Ratio Comparison

FHLC has a 0.08% expense ratio, which is lower than FESM's 0.28% expense ratio.

Dividends

FHLC vs. FESM - Dividend Comparison

FHLC's dividend yield for the trailing twelve months is around 1.43%, more than FESM's 0.53% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
FESM Fidelity Enhanced Small Cap ETF	0.53%	0.82%	1.08%	0.06%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
FHLC Fidelity MSCI Health Care Index ETF	1.43%	1.40%	1.51%	1.40%	1.30%	1.16%	1.45%	1.18%	1.38%	1.38%	1.40%	2.07%

Frequently Asked Questions

Can I hold both FHLC and FESM in my portfolio?

FHLC and FESM have a correlation of 0.43, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, FHLC or FESM?

FESM has higher volatility (5.64%) compared to FHLC (4.05%). In terms of maximum drawdown, FHLC dropped -28.76% vs FESM's -26.93%.

Which ETF is better, FHLC or FESM?

On 1-year performance, FESM leads with 46.73% vs 14.43% for FHLC. On fees, FHLC is cheaper at 0.08% per year. On volatility, FHLC has been the lower-risk option at 4.05%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, FHLC or FESM?

Over the 1-year period, FESM has performed better with a 46.73% return vs 14.43%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, FHLC or FESM?

FHLC is cheaper with a 0.08% expense ratio, compared with 0.28% for FESM.

Which ETF pays a higher dividend yield, FHLC or FESM?

FHLC has the higher dividend yield at 1.43%, compared with 0.53% for FESM.

What is the main difference between FHLC and FESM?

FHLC is categorized as Health & Biotech Equities, while FESM is Small Cap Blend Equities. Their fees differ too: 0.08% for FHLC and 0.28% for FESM.

Which has better risk-adjusted returns?

FESM currently has the higher Sharpe Ratio (2.48 vs 1.01), meaning it's delivered slightly more return per unit of risk over the trailing 12 months. However, this ranking shifts over time - use the Risk/Return Score above for a more comprehensive view that combines Sharpe, Sortino, and other measures used by quantitative funds.