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

If you're interested in broad exposure to the Materials - Broad segment of the equity market, look no further than the Fidelity MSCI Materials Index ETF (FMAT), 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.Sector ETFs are also funds of convenience, offering many 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 15, placing it in bottom 6%.Index DetailsThe fund is sponsored by Fidelity. It has amassed assets over $520.56 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.CostsExpense 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 1.70%.Sector Exposure and Top HoldingsIt 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.Looking at individual holdings, Linde Plc Common Stock (LIN) accounts for about 16.85% of total assets, followed by Sherwin Williams Co/the Common Stock Usd1.0 (SHW) and Ecolab Inc Common Stock Usd1.0 (ECL).The top 10 holdings account for about 54.42% of total assets under management.Performance and RiskYear-to-date, the Fidelity MSCI Materials Index ETF has added about 0.12% so far, and is down about -5.45% over the last 12 months (as of 03/24/2025). FMAT has traded between $47.60 and $55.17 in this past 52-week period.The ETF has a beta of 1.12 and standard deviation of 19.28% for the trailing three-year period, making it a medium risk choice in the space. With about 113 holdings, it effectively diversifies company-specific risk.AlternativesFidelity 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 $4.93 billion in assets, Materials Select Sector SPDR ETF has $5.34 billion. GUNR has an expense ratio of 0.46% and XLB charges 0.08%.Bottom LineTo 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.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 >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Fidelity MSCI Materials Index ETF (FMAT): ETF Research Reports Ecolab Inc. (ECL): Free Stock Analysis Report The Sherwin-Williams Company (SHW): Free Stock Analysis Report Materials Select Sector SPDR ETF (XLB): ETF Research Reports Linde PLC (LIN): Free Stock Analysis Report FlexShares Morningstar Global Upstream Natural Resources ETF (GUNR): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks