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) is a passively managed exchange traded fund launched on October 21, 2013.

Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.

Sector ETFs also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. 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 $615.77 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.

Costs

Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.

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 1.39%.

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 16.21% 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 57.17% of total assets under management.

Performance and Risk

The ETF return is roughly 14.16% so far this year and is up roughly 17.84% in the last one year (as of 08/13/2026). In that past 52-week period, it has traded between $48.779 and $62.52.

The ETF has a beta of 0.97 and standard deviation of 17.74% for the trailing three-year period, making it a medium risk choice in the space. With about 104 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 a great choice for investors seeking exposure to the Materials ETFs segment of the market. However, there are better ETFs in the space to consider.

FlexShares Morningstar Global Upstream Natural Resources ETF (GUNR) tracks Morningstar Global Upstream Natural Resources Index and the State Street Materials Select Sector SPDR ETF (XLB) tracks Materials Select Sector Index. FlexShares Morningstar Global Upstream Natural Resources ETF has $7.00 billion in assets, State Street Materials Select Sector SPDR ETF has $8.77 billion. GUNR has an expense ratio of 0.46%, and XLB charges 0.08%.

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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