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Should You Invest in the Fidelity MSCI Materials Index ETF (FMAT)?
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Designed to provide broad exposure to the Materials - Broad segment of the equity market, the Fidelity MSCI Materials Index ETF (FMAT - Free Report) is a passively managed exchange traded fund launched on 10/21/2013.
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
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 7, placing it in top 44%.
Index Details
The fund is sponsored by Fidelity. It has amassed assets over $203.28 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
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining 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 1.87%.
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 (LIN - Free Report) accounts for about 13.51% of total assets, followed by Air Products + Chemicals Inc (APD - Free Report) and Sherwin Williams Co/the (SHW - Free Report) .
The top 10 holdings account for about 54.93% of total assets under management.
Performance and Risk
Year-to-date, the Fidelity MSCI Materials Index ETF has added about 9.18% so far, and is up about 12.86% over the last 12 months (as of 11/06/2020). FMAT has traded between $20.81 and $36.96 in this past 52-week period.
The ETF has a beta of 1.16 and standard deviation of 26.53% 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 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 excellent 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 $3.07 billion in assets, Materials Select Sector SPDR ETF has $4.40 billion. GUNR has an expense ratio of 0.46% and XLB charges 0.13%.
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)?
Designed to provide broad exposure to the Materials - Broad segment of the equity market, the Fidelity MSCI Materials Index ETF (FMAT - Free Report) is a passively managed exchange traded fund launched on 10/21/2013.
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
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 7, placing it in top 44%.
Index Details
The fund is sponsored by Fidelity. It has amassed assets over $203.28 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
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining 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 1.87%.
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 (LIN - Free Report) accounts for about 13.51% of total assets, followed by Air Products + Chemicals Inc (APD - Free Report) and Sherwin Williams Co/the (SHW - Free Report) .
The top 10 holdings account for about 54.93% of total assets under management.
Performance and Risk
Year-to-date, the Fidelity MSCI Materials Index ETF has added about 9.18% so far, and is up about 12.86% over the last 12 months (as of 11/06/2020). FMAT has traded between $20.81 and $36.96 in this past 52-week period.
The ETF has a beta of 1.16 and standard deviation of 26.53% 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 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 excellent 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 $3.07 billion in assets, Materials Select Sector SPDR ETF has $4.40 billion. GUNR has an expense ratio of 0.46% and XLB charges 0.13%.
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.