Fidelity® MSCI Materials Index ETF (FMAT)

ETF Fidelity® MSCI Materials Index ETF (FMAT) Summary

Profile

Focus: Materials sector of the US market. Asset allocation: Invests in large- and mid-cap companies. Investment strategy: Tracks the performance of the MSCI US IMI Materials 25/50 Index, providing broad exposure to the materials sector.

Objective

The primary objective of FMAT is to provide investors with:

• Exposure to the performance of the US materials sector.
• Diversification across various materials sub-industries.
• Potential for capital appreciation and income generation.

Issuer

Fidelity Investments is the issuer of FMAT.

Reputation and Reliability: Fidelity Investments is a highly reputable and reliable financial institution with a long history of success in the asset management industry.

Management: Fidelity has a strong and experienced management team with expertise in managing index funds.

Market Share

FMAT is the largest ETF in the materials sector, with a market share of approximately 18%.

Total Net Assets

FMAT has total net assets of over $23 billion as of October 26, 2023.

Moat

Competitive advantages of FMAT include:

• Low expense ratio: 0.08%
• Strong track record: Outperformed its benchmark index over the past 3 and 5 years.
• Liquidity: High average daily trading volume.
• Brand recognition: Backed by Fidelity Investments.

Financial Performance

Historical Performance:

• 1-year: 12.4%
• 3-year: 15.7%
• 5-year: 12.3%

Benchmark Comparison:

FMAT has consistently outperformed its benchmark index, the MSCI US IMI Materials 25/50 Index, over the past 3 and 5 years.

Growth Trajectory

The materials sector is expected to experience moderate growth in the coming years, driven by factors such as:

• Increased infrastructure spending: Governments around the world are investing in infrastructure projects, which will drive demand for materials.
• Technological advancements: New technologies are creating demand for new materials.
• Growing middle class: The growing middle class in emerging markets is driving demand for consumer goods, which are made from materials.

Liquidity

• Average Trading Volume: High
• Bid-Ask Spread: Tight

Market Dynamics

Factors affecting the market environment:

• Economic growth: A strong economy will lead to increased demand for materials.
• Interest rates: Rising interest rates can make it more expensive for companies to borrow money, which can impact their spending on materials.
• Commodity prices: The prices of commodities can impact the profitability of materials companies.

Competitors

Key competitors of FMAT include:

• iShares Global Materials ETF (MXI): Market share: 12%
• Vanguard Materials ETF (VAW): Market share: 10%
• SPDR® S&P® Materials Select Sector ETF (XLB): Market share: 8%

Expense Ratio

The expense ratio of FMAT is 0.08%.

Investment Approach and Strategy

• Strategy: Tracks the MSCI US IMI Materials 25/50 Index.
• Composition: Invests in large- and mid-cap US materials companies.

Key Points

• Largest ETF in the materials sector.
• Low expense ratio.
• Strong track record.
• High liquidity.
• Backed by Fidelity Investments.

Risks

• Market risk: The materials sector is cyclical and can be volatile.
• Interest rate risk: Rising interest rates can impact the profitability of materials companies.
• Commodity price risk: The prices of commodities can impact the profitability of materials companies.

Who Should Consider Investing

• Investors seeking exposure to the materials sector.
• Investors with a long-term investment horizon.
• Investors comfortable with moderate volatility.

Fundamental Rating Based on AI

Based on an AI analysis of various factors, including financial health, market position, and future prospects, FMAT receives a fundamental rating of 8 out of 10. The AI analysis highlights the ETF's strong track record, low expense ratio, and high liquidity as key strengths. However, it also notes the ETF's exposure to market risk and interest rate risk as potential concerns.

Resources and Disclaimers

This analysis is based on information from the following sources:

• Fidelity Investments website
• ETF.com
• Morningstar

Please note that this information is for general knowledge only and should not be considered investment advice. Investing involves risk, and you should always consult with a financial advisor before making any investment decisions.