FMAT vs XME

FMATAFidelity MSCI Materials Index ETF

XMEBState Street SPDR S&P Metals & Mining 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.

XME Not the chemicals-heavy materials fund. XME holds roughly 40 miners and steelmakers on a modified equal weight, so a small copper name carries about the weight of a giant. Ore, coal and metal, 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.

XME The fund seeks to track, before fees and expenses, the total return performance of the S&P Metals and Mining Select Industry 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.

• XME Pure play on the metals and mining slice: aluminum, coal, copper, gold, precious metals, silver and steel sub-industries, not the whole materials sector.ssga.com
• Modified equal weighting spreads exposure across large, mid and small caps, so the biggest miners don't set the tone for the whole portfolio.ssga.com
• One of the more actively traded funds in its corner of the market, and a multi-billion-dollar fund that has been running since 2006.
• 0.35% expense ratio, slightly under the median for the materials funds we grade, which is unusual for a narrow industry sleeve.

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.

• XME Broad materials funds cost far less: XLB at 0.08% and VAW at 0.09%. They also own a very different mix, chemicals and packaging included.
• About 40 names, many of them smaller miners, in one cyclical industry. Swings run wider than a diversified sector fund's.
• The portfolio's fortunes track commodity cycles in steel, coal, copper and gold rather than broad industrial demand.ssga.com

Full FMAT profile⁠

Full XME profile⁠