Fidelity Digital Health ETF (FDHT US) – Portfolio Construction Methodology

The underlying Fidelity Digital Health Index provides global equity exposure to companies whose products and services enable the digitization of health care delivery, diagnostics and administration. The index starts from a broad developed and emerging markets universe and applies size and liquidity screens so constituents are seasoned, tradable large-, mid- and select small-cap stocks. Natural language processing of company filings, transcripts and other disclosures is used to assign each security a digital health relevance score based on the share of revenue, capital spending and research directed to telemedicine, connected devices, health-care analytics and related themes. A fundamental overlay favors firms with stronger growth, profitability and balance sheets, and excludes those with deteriorating financial quality. Eligible securities are then weighted by free-float market cap scaled by their thematic scores, subject to issuer caps to limit concentration, and the index is reconstituted and rebalanced quarterly.

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