FMAT vs XLB

FMATAFidelity MSCI Materials Index ETF

XLBAState Street Materials Select Sector SPDR 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.

XLB The original materials play. A 1998-vintage slice of the S&P 500's chemical, mining, packaging and building-materials names, run at eight basis points and traded in size all day long.

Stated mandate

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

XLB The fund seeks to track, before expenses, the price and yield performance of the Materials Select Sector Index.

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.

• XLB Charges 0.08% a year against a peer-group median of 0.38%, and nothing in the cohort undercuts it (FMAT matches).
• Trading since December 1998 as one of the original Select Sector SPDRs, with a multi-billion-dollar asset base behind it.sec.gov
• Very actively traded for a sector fund, which is the whole point if you use it for tactical tilts rather than buy-and-forget.
• Clean mandate: chemicals, metals and mining, paper and forest products, containers and packaging, construction materials. No thematic drift.ssga.com

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.

• XLB Around 26 stocks, and index rules let one name reach 25% at a quarter-end measurement. A couple of chemical giants carry outsized weight.sec.gov
• The universe is the S&P 500 only. Smaller miners and specialty producers sit outside the net, which is the water VAW and XME fish in.ssga.com
• One sector, tied to commodity prices and building demand, so it can travel a very different path from the broad market. Distributions come quarterly.ssga.com

Full FMAT profile⁠

Full XLB profile⁠