Designed to provide broad exposure to the Materials - Broad segment of the U.S. equity market, the FID-MATRLS (FMAT) is a passively managed exchange traded fund launched on 10/21/2013.
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.
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 7, placing it in top 44%.
The fund is sponsored by Fidelity. It has amassed assets over $244.46 M, making it one of the average sized ETFs attempting to match the performance of the Materials - Broad segment of the U.S. equity market. FMAT seeks to match the performance of the MSCI USA IMI Materials Index before fees and expenses.
MSCI USA IMI Materials Index represents the performance of the materials sector in the U.S. equity market.
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 1.67%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Materials sector--about 100% of the portfolio.
Looking at individual holdings, Dowdupont Inc (DWDP) accounts for about 17.98% of total assets, followed by Praxair Inc (PX) and Lyondellbasell Indu Cl A (LYB).
The top 10 holdings account for about 49.95% of total assets under management.
Performance and Risk
So far this year, FMAT has lost about -1.53%, and is up roughly 8.09% in the last one year (as of 07/18/2018). During this past 52-week period, the fund has traded between $30.89 and $37.07.
The ETF has a beta of 1.28 and standard deviation of 16.68% for the trailing three-year period, making it a medium risk choice in the space. With about 123 holdings, it effectively diversifies company-specific risk.
FID-MATRLS 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 good 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.
Materials Select Sector SPDR Fund (XLB) tracks Materials Select Sector Index and the FlexShares Morningstar Global Upstream Natural Resources Index Fund (GUNR) tracks Morningstar Global Upstream Natural Resources Index. Materials Select Sector SPDR Fund has $4.66 B in assets, FlexShares Morningstar Global Upstream Natural Resources Index Fund has $5.70 B. XLB has an expense ratio of 0.13% and GUNR charges 0.46%.
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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FID-MATRLS (FMAT): ETF Research Reports
Praxair, Inc. (PX) : Free Stock Analysis Report
LyondellBasell Industries N.V. (LYB) : Free Stock Analysis Report
SPDR-MATLS SELS (XLB): ETF Research Reports
Dow Chemical Company (The) (DWDP) : Free Stock Analysis Report
FLEXS-MRN GUNR (GUNR): ETF Research Reports
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