FMAT vs SLX

FMATBFidelity MSCI Materials Index ETF

SLXDVanEck Steel 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.

SLX Most materials funds hand you chemicals, paint and packaging. SLX skips all that for steel alone: roughly 40 mills and miners worldwide, tracked by index since 2006.

Stated mandate

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

SLX The fund seeks to track, before fees and expenses, the price and yield performance of the MarketVector Global Steel Index, representing companies involved in the global steel segment.

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.

• SLX Pure steel, not diluted. It tracks the MarketVector Global Steel Index, roughly 40 companies in the steel segment, instead of a broad materials basket.vaneck.com
• Global by design: the index reaches steel companies listed outside the US, so exposure is not tied to one country's mills.vaneck.com
• Launched in 2006 and run as a passive index fund, it has carried the same single-industry mandate through multiple steel cycles.

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.

• SLX The specialty focus comes at a specialty price: 0.55% a year, versus 0.08% for XLB and 0.09% for VAW on the broad materials side.
• One industry, about 40 names. Results ride on the global steel segment rather than the wider materials sector, and holdings are spread across foreign markets.
• Cash comes back once or twice a year, not monthly, and the fund sits on the smaller, moderately traded end of its category.

Full FMAT profile⁠

Full SLX profile⁠