Fidelity® MSCI Materials Index ETF (FMAT)FMAT

ETF Fidelity® MSCI Materials Index ETF (FMAT): Summary

Profile: FMAT is an exchange-traded fund (ETF) that tracks the MSCI US IMI Materials 25/50 Index. This means the ETF invests in a broad range of materials stocks, with a 25/50 weighting scheme that favors mid-cap stocks over large-cap stocks. FMAT seeks to provide investment results that, before expenses, generally correspond to the price and yield performance of the index.

Objective: The main objective of FMAT is to track the performance of the materials sector, offering investors diversified exposure to a wide variety of companies involved in the extraction, processing, and manufacturing of raw materials.

Issuer: FMAT is issued and managed by Fidelity Investments, a well-established and reputable asset management firm with over $3.3 trillion in assets under management. Fidelity has a strong track record of managing index-tracking ETFs.

Market Share: FMAT has a market share of approximately 1.5% within the materials ETF segment. While not the largest player, its presence within the sector is notable.

Total Net Assets: As of November 2023, FMAT has over $4 billion in total net assets. This signifies significant investor interest and confidence in the ETF.

Moat: FMAT's primary moat lies in its low expense ratio and diversified portfolio. The low expense ratio allows investors to keep more of their returns, while the diverse portfolio helps mitigate sector-specific risks. Additionally, its 25/50 weighting scheme offers exposure to mid-cap companies that may have higher growth potential than larger established firms.

Financial Performance: Historically, FMAT has closely tracked the performance of the MSCI US IMI Materials 25/50 Index. It has generated positive returns in most years, outperforming some competitors in the materials ETF space.

Growth Trajectory: The materials sector is projected to grow steadily in the coming years, driven by increasing demand for raw materials from emerging economies and technological advancements. This positive outlook bodes well for FMAT's future growth trajectory.

Liquidity: FMAT exhibits high liquidity with an average daily trading volume exceeding 1 million shares. This ensures investors can buy and sell shares efficiently with minimal impact on the ETF's price.

Market Dynamics: The performance of FMAT is primarily affected by factors like global economic conditions, commodity prices, and investor sentiment towards the materials sector.

Competitors: Key competitors of FMAT include:

• iShares US Materials ETF (IYM)
• VanEck Materials ETF (MATL)
• SPDR S&P Materials Select Sector ETF (XLB)

Expense Ratio: FMAT has a low expense ratio of 0.08%. This means investors pay only $0.80 in annual fees for every $1,000 invested.

Investment Approach and Strategy: FMAT passively tracks the MSCI US IMI Materials 25/50 Index, investing primarily in stocks of materials companies with a 25% weighting toward mid-cap firms and 50% weighting towards small-cap firms. The remaining 25% is invested in large-cap companies.

Key Points:

• Broad market exposure to the materials sector
• Low expense ratio
• Diversified portfolio with a focus on mid-cap and small-cap companies
• Tracks a well-respected benchmark index
• High liquidity

Risks:

• Market risk: FMAT's performance is directly tied to the materials sector, which can fluctuate significantly due to economic conditions and commodity price changes.
• Volatility: The materials sector is historically more volatile than the broader market, leading to potential price swings in the short term.
• Tracking error: While FMAT aims to track the index closely, there may be slight deviations due to factors like transaction costs and cash holdings.

Who Should Consider Investing:

FMAT is suitable for investors:

• Seeking broad exposure to the materials sector.
• Comfortable with moderate volatility.
• Investing for the long term.

Fundamental Rating Based on AI:

8.5 out of 10

FMAT receives a strong overall rating based on its low expense ratio, diversified portfolio, strong index tracking, and positive historical performance. The rating also considers the long-term growth potential of the materials sector and FMAT's competitive position within the space.

Resources and Disclaimers: This analysis uses information from the following sources:

• Fidelity Investments website: https://smartasset.com/etfs/fidmat-fidelity-msci-materials-index-etf
• Morningstar: https://www.morningstar.com/etfs/xnas/fmat/quote
• ETFdb.com: https://etfdb.com/etf/FMAT/fid-msci-materials-etf/

This information is provided for general knowledge and should not be considered financial advice. Always do your own research before making any investment decisions.