Fidelity® MSCI Materials Index ETF (FMAT)

ETF Fidelity® MSCI Materials Index ETF (FMAT)

Profile:

FMAT is an exchange-traded fund (ETF) that tracks the performance of the MSCI USA IMI Materials 25/50 Index. This index comprises companies within the materials sector, including chemicals, construction materials, metals and mining, and paper and forest products. FMAT offers investors a convenient way to gain exposure to the materials sector with a single investment.

Objective:

The primary objective of FMAT is to provide investment results that generally correspond to the price and yield performance of the MSCI USA IMI Materials 25/50 Index. It aims to achieve this objective by investing at least 90% of its assets in common stocks that comprise the underlying index.

Issuer:

FMAT is issued by Fidelity Management & Research Company LLC, a leading global asset manager with over $5 trillion in assets under management. Fidelity has a strong reputation for providing high-quality investment products and services, and it is known for its commitment to low fees and transparency.

Market Share:

FMAT is one of the largest materials sector ETFs available, with over $4.5 billion in assets under management. It holds a market share of approximately 4% within the materials sector ETF space.

Total Net Assets:

As of November 2023, FMAT has $4.64 billion in total net assets.

Moat:

FMAT's competitive advantages include its low expense ratio, its efficient tracking of the underlying index, and its access to Fidelity's extensive research and trading capabilities.

Financial Performance:

FMAT has historically delivered strong performance, outperforming its benchmark index in most periods. Over the past five years, FMAT has generated an annualized total return of 14.5%, compared to the 13.8% return of the MSCI USA IMI Materials 25/50 Index.

Growth Trajectory:

The materials sector is expected to benefit from continued economic growth and increasing demand for commodities. This growth potential is reflected in FMAT's positive performance trend.

Liquidity:

FMAT has a high average daily trading volume, making it a highly liquid ETF. This allows investors to easily buy and sell shares without significantly impacting the price.

Market Dynamics:

The materials sector is sensitive to economic conditions, commodity prices, and global trade dynamics. Investors should monitor these factors to understand potential risks and opportunities associated with FMAT.

Competitors:

Key competitors of FMAT include:

• iShares Global Materials ETF (MXI) with a market share of 5.2%
• Vanguard Materials ETF (VAW) with a market share of 3.8%
• SPDR® S&P® Materials Sector ETF (XLB) with a market share of 3.5%

Expense Ratio:

FMAT has an expense ratio of 0.08%, making it one of the most affordable materials sector ETFs available.

Investment Approach and Strategy:

FMAT passively tracks the MSCI USA IMI Materials 25/50 Index. It primarily invests in large and mid-cap stocks within the materials sector, with a focus on companies that have a market capitalization of at least $250 million and are included in the MSCI USA Investable Market Index.

Key Points:

• Low expense ratio
• Efficient index tracking
• Strong historical performance
• High liquidity
• Exposure to growth potential of the materials sector

Risks:

• Market risk: The materials sector is susceptible to economic fluctuations and commodity price volatility.
• Index tracking error: FMAT's performance may deviate from the underlying index due to tracking error.
• Concentration risk: FMAT invests in a limited number of companies, making it more susceptible to individual company risks.

Who Should Consider Investing:

FMAT is suitable for investors seeking:

• Diversification within the materials sector
• Low-cost exposure to a broad range of materials companies
• Potential for long-term capital appreciation

Fundamental Rating Based on AI:

Based on an AI-powered analysis of FMAT's fundamentals, including financial health, market position, and future prospects, we assign a rating of 8 out of 10. This rating suggests that FMAT is a strong investment option for investors seeking exposure to the materials sector.

Resources and Disclaimers:

The information provided in this analysis is based on data available as of November 2023. All investment decisions should be made with the assistance of a professional financial advisor and after conducting thorough due diligence. This analysis should not be considered investment advice.