For investors looking for momentum, Fidelity MSCI Materials Index ETF (FMAT Quick QuoteFMAT - Free Report) is probably a suitable pick. The fund just hit a 52-week high and is up 83.3% from its 52-week low price of $26.10/share.

Let’s take a look at the fund and its near-term outlook to gain an insight into where it might be headed:

FMAT in Focus

This ETF seeks to provide investment returns that correspond, before fees and expenses, generally to the performance of the MSCI USA IMI Materials Index. It has AUM of $463.7 million and charges 8 basis points in annual fees.

Why the Move?

The materials sector, which is the most sensitive to global economic growth expectations, is gaining from a dovish Fed. Lower rates put pressure on the U.S. dollar that makes dollar-denominated materials cheap for foreign investors, raising demand for products that these companies sell. Also, as the sector is highly dependent on interest rates for capital expenditures, low rates are a boon. The coronavirus vaccine rollout and strong fiscal stimulus support have fueled investors’ hopes of faster economic recovery in the United States. This is making funds like FMAT an attractive investment option.

More Gains Ahead?

The fund has a Zacks ETF Rank #2 (Buy). It seems like it might remain strong, which gives cues of further rally.

Want key ETF info delivered straight to your inbox?

Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free>>