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

Launched on October 21, 2013, the Fidelity MSCIMSCI-- Materials Index ETF (FMAT) is a passively managed exchange traded fund designed to provide a 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.

Investor-friendly, sector ETFs provide many options 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 14, placing it in bottom 13%.

Index Details

The fund is sponsored by Fidelity. It has amassed assets over $535.99 million, making it one of the average sized ETFs attempting to match the performance of the Materials - Broad segment of the equity market. FMATFMAT-- 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 1.45%.

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 14.77% of total assets, followed by Newmont Corp Common Stock Usd1.6 (NEM) and Freeport Mcmoran Inc Common Stock Usd.1 (FCX).

The top 10 holdings account for about 55.67% of total assets under management.

Performance and Risk

So far this year, FMAT has added about 10.2%, and was up about 26.64% in the last one year (as of 04/06/2026). During this past 52-week period, the fund has traded between $42.02 and $62.52.

The ETF has a beta of 1.03 and standard deviation of 17.26% for the trailing three-year period, making it a medium risk choice in the space. With about 109 holdings, it effectively diversifies company-specific risk.

Alternatives

Fidelity MSCI Materials Index ETF sports a Zacks ETF Rank of 4 (Sell), which is based on expected asset class return, expense ratio, and momentum, among other factors. FMAT, then, is not the best option for investors seeking exposure to the Materials ETFs segment of the market. However, there are better ETFs in the space to consider.

State Street Materials Select Sector SPDR ETF (XLB) tracks Materials Select Sector Index and the FlexShares Morningstar Global Upstream Natural Resources ETF (GUNR) tracks Morningstar Global Upstream Natural Resources Index. State Street Materials Select Sector SPDR ETF has $6.64 billion in assets, FlexShares Morningstar Global Upstream Natural Resources ETF has $7.61 billion. XLB has an expense ratio of 0.08%, and GUNR charges 0.46%.

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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