Designed to provide broad exposure to the Materials - Broad segment of the equity market, the Fidelity MSCI Materials Index ETF (FMAT) is a passively managed exchange traded fund launched on 10/21/2013.

Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.

Sector ETFs are also funds of convenience, offering many ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Materials - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 10, placing it in bottom 38%.

Index Details

The fund is sponsored by Fidelity. It has amassed assets over $561.33 million, making it one of the average sized ETFs attempting to match the performance of the Materials - Broad segment of the equity market. FMAT seeks to match the performance of the MSCI USA IMI Materials Index before fees and expenses.

The MSCI USA IMI Materials 25/50 Index represents the performance of the materials sector in the U.S. equity market.

Costs

Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.

Annual operating expenses for this ETF are 0.08%, making it the least expensive product in the space.

It has a 12-month trailing dividend yield of 1.58%.

Sector Exposure and Top Holdings

While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.

Looking at individual holdings, Linde Plc Common Stock (LIN) accounts for about 15.44% of total assets, followed by Sherwin Williams Co/the Common Stock Usd1.0 (SHW) and Air Products + Chemicals Inc Common Stock Usd1.0 (APD).

The top 10 holdings account for about 51.99% of total assets under management.

Performance and Risk

Year-to-date, the Fidelity MSCI Materials Index ETF has gained about 6.01% so far, and was up about 11.12% over the last 12 months (as of 01/22/2025). FMAT has traded between $46.08 and $55.17 in this past 52-week period.

The ETF has a beta of 1.12 and standard deviation of 19.70% for the trailing three-year period, making it a medium risk choice in the space. With about 118 holdings, it effectively diversifies company-specific risk.

Alternatives

Fidelity MSCI Materials Index ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, FMAT is a good option for those seeking exposure to the Materials ETFs area of the market. Investors might also want to consider some other ETF options in the space.