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Should You Invest in the Fidelity MSCI Materials Index ETF (FMAT)?
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The Fidelity MSCI Materials Index ETF (FMAT - Free Report) 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.
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
Additionally, sector ETFs offer convenient 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 4, placing it in top 25%.
Index Details
The fund is sponsored by Fidelity. It has amassed assets over $318.01 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.
MSCI USA IMI Materials 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 1.67%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Materials sector--about 100% of the portfolio.
Looking at individual holdings, Linde Plc Common Stock Eur.001 (LIN - Free Report) accounts for about 12.22% of total assets, followed by Air Products + Chemicals Inc Common Stock Usd1.0 (APD - Free Report) and Dupont De Nemours Inc Common Stock Usd.01 (DD - Free Report) .
The top 10 holdings account for about 52.17% of total assets under management.
Performance and Risk
The ETF has added roughly 4.71% so far this year and is up about 35.86% in the last one year (as of 02/26/2021). In that past 52-week period, it has traded between $20.81 and $43.03.
The ETF has a beta of 1.13 and standard deviation of 26.85% for the trailing three-year period, making it a medium risk choice in the space. With about 116 holdings, it effectively diversifies company-specific risk.
Alternatives
Fidelity MSCI Materials Index ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, FMAT is an outstanding option for investors seeking exposure to the Materials ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
FlexShares Morningstar Global Upstream Natural Resources ETF (GUNR - Free Report) tracks Morningstar Global Upstream Natural Resources Index and the Materials Select Sector SPDR ETF (XLB - Free Report) tracks Materials Select Sector Index. FlexShares Morningstar Global Upstream Natural Resources ETF has $4.32 billion in assets, Materials Select Sector SPDR ETF has $6.32 billion. GUNR has an expense ratio of 0.46% and XLB charges 0.12%.
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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Should You Invest in the Fidelity MSCI Materials Index ETF (FMAT)?
The Fidelity MSCI Materials Index ETF (FMAT - Free Report) 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.
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
Additionally, sector ETFs offer convenient 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 4, placing it in top 25%.
Index Details
The fund is sponsored by Fidelity. It has amassed assets over $318.01 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.
MSCI USA IMI Materials 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 1.67%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Materials sector--about 100% of the portfolio.
Looking at individual holdings, Linde Plc Common Stock Eur.001 (LIN - Free Report) accounts for about 12.22% of total assets, followed by Air Products + Chemicals Inc Common Stock Usd1.0 (APD - Free Report) and Dupont De Nemours Inc Common Stock Usd.01 (DD - Free Report) .
The top 10 holdings account for about 52.17% of total assets under management.
Performance and Risk
The ETF has added roughly 4.71% so far this year and is up about 35.86% in the last one year (as of 02/26/2021). In that past 52-week period, it has traded between $20.81 and $43.03.
The ETF has a beta of 1.13 and standard deviation of 26.85% for the trailing three-year period, making it a medium risk choice in the space. With about 116 holdings, it effectively diversifies company-specific risk.
Alternatives
Fidelity MSCI Materials Index ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, FMAT is an outstanding option for investors seeking exposure to the Materials ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
FlexShares Morningstar Global Upstream Natural Resources ETF (GUNR - Free Report) tracks Morningstar Global Upstream Natural Resources Index and the Materials Select Sector SPDR ETF (XLB - Free Report) tracks Materials Select Sector Index. FlexShares Morningstar Global Upstream Natural Resources ETF has $4.32 billion in assets, Materials Select Sector SPDR ETF has $6.32 billion. GUNR has an expense ratio of 0.46% and XLB charges 0.12%.
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.