Should You Invest in the Fidelity MSCI Materials Index ETF (FMAT)?

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

An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.

Sector ETFs also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. Materials - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 6, placing it in top 38%.

Index Details

The fund is sponsored by Fidelity. It has amassed assets over $413.44 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 1.69%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, 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 16.95% of total assets, followed by Sherwin Williams Co/the Common Stock Usd1.0 (SHW) and Crh Plc Common Stock Eur.32 (CRH).

The top 10 holdings account for about 56.59% of total assets under management.

Performance and Risk

The ETF has gained about 1.18% so far this year and is down about -3.48% in the last one year (as of 05/26/2025). In that past 52-week period, it has traded between $42.02 and $55.17.

The ETF has a beta of 1.07 and standard deviation of 20.10% for the trailing three-year period, making it a medium risk choice in the space. With about 107 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 sufficient 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.

FlexShares Morningstar Global Upstream Natural Resources ETF (GUNR) tracks Morningstar Global Upstream Natural Resources Index and the Materials Select Sector SPDR ETF (XLB) tracks Materials Select Sector Index. FlexShares Morningstar Global Upstream Natural Resources ETF has $4.69 billion in assets, Materials Select Sector SPDR ETF has $4.74 billion. GUNR has an expense ratio of 0.46% and XLB charges 0.08%.

Bottom Line

To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.

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This article originally published on Zacks Investment Research (zacks.com).

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