Looking for broad exposure to the Materials - Broad segment of the equity market? You should consider 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 Details

The fund is sponsored by Fidelity. It has amassed assets over $538.09 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 Index represents the performance of the materials sector in the U.S. equity market.

Costs

When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.

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 1.57%.

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.

Looking at individual holdings, Linde Plc Common Stock (LIN) accounts for about 15.99% of total assets, followed by Sherwin Williams Co/the Common Stock Usd1.0 (SHW) and Air Products + Chemicals Inc Common Stock Usd1.0 (APD).

The top 10 holdings account for about 51.83% of total assets under management.

Performance and Risk

So far this year, FMAT has added roughly 7.48%, and was up about 15.68% in the last one year (as of 09/16/2024). During this past 52-week period, the fund has traded between $41.66 and $52.91.

The ETF has a beta of 1.11 and standard deviation of 19.99% 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.