Is FSML a good ETF?
FSML is the Firetrail Australian Small Companies Fund - Active ETF. It tracks the S&P/ASX Small Ordinaries Index. We classify it under AU and Small-Cap. With about $765 million in assets it is a solidly established fund. Listed on the ASX since 2020-02-20 (over 6 years ago).
On a total-return basis, FSML has delivered 7.64% a year over 5 years (ranked 93rd of 188 ETFs we track), 19.06% a year over 3 years (ranked 29th of 226 ETFs we track), and 10.8% a year over 1 year (ranked 118th of 308 ETFs we track). Its strongest showing is over 3 years, where it sits in the top 13% of all ETFs we track.
The management fee of 0.85% is high, which is common for active, geared or thematic strategies and only worth paying if the approach justifies it. For comparison, similar ETFs average around 0.34%. If cost is your priority, EX20 (0.25%), VSO (0.3%), and MVW (0.35%) cover similar ground for less. It pays a high 6.1% yield — generous income, but check it isn't a sign of a narrow or higher-risk portfolio. Bear in mind distributions are taxed each year at your marginal rate, so a high yield is less tax-efficient for higher earners and during the accumulation phase, though 60% franking softens the blow for Australian residents.
Over the past 5 years its volatility has been elevated (annualised standard deviation around 16.88%), meaning noticeably larger swings than the broad market. Its 5-year Sharpe ratio of 0.33 is weak — that's the return it has earned per unit of risk taken (higher is better).
Portfolio turnover is very high at about 90% a year — the fund effectively rebuilds its portfolio each year, which realises capital gains aggressively and can create a meaningful tax drag, especially for higher earners holding it outside super.
Strengths
- Top-13% returns over 3 years (29th of 226 ETFs we track).
- High 6.1% income yield — good for investors who want regular cash flow.
Things to watch
- A 0.85% management fee is high and compounds against you over time.
- Pricier than similar ETFs, which average around 0.34%.
- Cheaper alternatives exist: EX20, VSO, and MVW.
- That income is taxed yearly at your marginal rate, so it's less efficient for higher earners.
- Weak risk-adjusted returns (5-year Sharpe ratio 0.33).
- High portfolio turnover (90% a year) means frequent trading that realises capital gains, adding tax drag — less efficient than a low-turnover index fund.
Good to know
- Distributions are 60% franked, a tax bonus for Australian residents.
- Australian focus means franked dividends and no currency risk, but heavy concentration in banks and miners.
What FSML's categories mean for you
How each category this ETF belongs to tends to behave across market cycles.
Australian shares. Home-market familiarity, fully franked dividends and no currency risk for local investors — but very concentrated in banks and miners, which dominate the index.
- Market regime
- Sensitive to commodity prices, Chinese demand and domestic interest rates. Generous income, but narrow sector diversification.
- In a portfolio
- A natural core for Australian investors thanks to franking, but should be paired with global exposure so you aren't over-reliant on a handful of banks and resource giants.
Smaller companies, which historically carry a long-run 'size premium' alongside greater volatility and lower liquidity.
- Market regime
- Tends to lead early in economic recoveries and falls hardest in recessions and credit crunches, as smaller firms are more economically sensitive.
- In a portfolio
- A long-horizon satellite tilt for extra growth — expect a bumpier ride than large-cap and broad-market funds.
General information only, generated from the fund's published data — not personal financial advice. Past performance is not a reliable indicator of future returns. Consider your own circumstances or seek licensed advice before investing.