FMAT vs PSCM

FMATAFidelity MSCI Materials Index ETF

PSCMCInvesco S&P SmallCap Materials ETF

In short

FMAT The whole US materials sector in one cheap wrapper: chemicals, industrial gases, miners and packagers, roughly 120 names spanning large down to small caps, for 0.08% a year. Fidelity has run it since 2013.

PSCM Materials, but small. Where the big sector funds lean on large-cap chemical majors, PSCM sticks to small-cap US materials companies (chemicals, packaging, metals and mining) for 0.29% a year.

Stated mandate

FMAT The fund seeks to provide returns that generally correspond, before fees and expenses, to the MSCI USA IMI Materials Index.

PSCM The fund tracks an index measuring the performance of securities of US basic materials companies.

Why people hold it

• FMAT Costs 0.08% a year, tied with XLB for the lowest fee among materials ETFs and a fraction of what the typical fund in the group charges.
• Tracks MSCI's investable-market index, so the basket reaches past the mega caps into mid and small caps: roughly 120 holdings, not a dozen giants.fidelity.com
• Does what the label says. Its returns have hugged its stated MSCI materials index, one of the stronger index implementations in its peer group.
• Live since 2013 with a multi-hundred-million-dollar asset base and quarterly distributions.

• PSCM A size slice most materials funds don't offer: US small caps only, materials only, no drift into large caps or overseas names.invesco.com
• 0.29% a year, below the median expense ratio among broad materials ETFs.
• Live since 2010, so it has traded through full commodity cycles rather than launching into one. Pays quarterly.

Worth knowing

• FMAT One sector, and a cyclical one. Materials profits ride commodity prices and industrial demand, so this can move a long way from the broad market in either direction.
• US-listed companies only, so the big Australian, Canadian and European miners sit outside the basket.fidelity.com
• Moderately traded rather than a volume leader, so spreads can run wider than at the busiest materials funds, especially in fast markets.

• PSCM Thinly traded with a small asset base. Spreads can widen, so the fill price can matter more than the expense ratio.
• Roughly two dozen holdings, so one name can move the whole fund, and small-cap materials swing with the commodity cycle.
• For the whole materials sector instead of the small-cap corner, XLB, VAW and FMAT are broader, far more traded, and cheaper.

Full FMAT profile⁠

Full PSCM profile⁠