What Are Top Materials Equity Mutual Funds?

Dec 25, 2023 By Triston Martin

This sector is sometimes referred to as the basic materials sector because demand is often the primary factor influencing the price of raw resources like gold and other metals. The sector dealing in basic materials is susceptible to supply and demand shifts.


There is some degree of overlap between the basic materials industry and the energy and utility industries. The most important distinction is that the materials sector is largely concerned with the early-stage processing of raw materials and does not often generate products that go to consumers. This is because the materials industry has a much longer supply chain than the consumer goods sector.


Admiral Shares of the Vanguard Materials Index Fund (VMIAX)


The Vanguard Materials Index Fund Admiral Shares is consistently ranked as one of the most well-liked index funds in the fundamental materials sector (VMIAX). The performance of the Morgan Stanley Capital International (MSCI) U.S. Investable Market Materials 25/50 Index is tracked by Vanguard's VMIAX index fund. This index comprises the big, medium, and small U.S. firms operating within the materials industry. The expense ratio, which measures how much it costs to administer the fund, is often lower for the VMIAX than for many of its rivals.


  • As of December 31, 2021, the net assets amounted to $5.3 billion.
  • As of December 17, 2021, the expense ratio is 0.10 percent.
  • As of January 31, 2022, the yield was 1.55 percent.


It is sufficient for a stock to be labeled as materials by the Global Industry Classification Standard to be considered for inclusion (GICS). On the other hand, the weighting of the fund's portfolio is virtually split evenly across its top 10 holdings, which are mentioned below.


  • Linde plc
  • Sherwin-Williams Company, Freeport-McMoRan Inc.


Performance


As can be seen in the table below, the fund has turned in a respectable performance throughout the years.


  • After one year, the percentage is 21.45
  • 17.66% after three years
  • 11.28 percent throughout five years
  • This fund was established on February 11, 2004, and Morningstar has given it a rating of four stars.


The Fidelity Select Chemicals Portfolio Fund


The Fidelity Select Chemicals Portfolio Fund (FSCHX), which has been around since July 29, 1985, is an investment vehicle specializing in a materials industry segment. The fund invests eighty percent of its total assets in the common stocks of chemical process sector businesses involved in research and development, marketing, or production of their products.


  • As of January 31, 2022, the company's net assets were $784.84 million.
  • As of April 29 in 20215, the expense ratio was 0.78 percent.
  • As of December 31, 2021, the yield was.81 percent.
  • Subsectors
  • As of December 31, 2021, the bulk of the fund's assets was invested in the following subsectors:


Holdings make up 6.48 percent of the business, with Specialty Chemicals contributing 42.32 percent, Industrial Gases contributing 25.70 percent, Commodity Chemicals contributing 12.08 percent, and Fertilizers and Agricultural Chemicals contributing 10.83 percent. As of the end of 2021, the top holdings in the fund's portfolio, which are mentioned below, account for almost 65 percent of the total weighting.



Performance


The following chart illustrates the fund's performance throughout the years:


  • After one year, the percentage is 24.83
  • 13.25 percent after three years
  • 8.55 percent throughout five years
  • Out of the 102 funds Morningstar evaluated, the Fidelity Select Chemicals Portfolio Fund was given an overall grade of four stars.


In contrast to those in the energy and utility sectors, companies in the basic materials sector engage in the first stages of processing raw materials and do not manufacture goods for sale to end-users.


Portfolio Fund from Fidelity Investments (FSDPX)


The Fidelity Select Materials Portfolio Fund (FSDPX), established on September 29, 1986, is yet another reliable choice among the available materials funds. Most of the fund's assets are invested in businesses that are engaged in producing raw materials and intermediate commodities, such as those that mine for raw materials, process them, or distribute them. Most of the securities that make up the FSDPX are comprised of common equities issued by mid-sized corporations.


  • As of January 31, 2022, the company's net assets were $639.46 million.
  • As of April 29, 20219, the expense ratio was 0.80 percent.
  • As of February 10, 202210, the yield was.77 percent.
  • Subsectors


Performance


The following is a rundown of how well Fidelity's FSDPX has performed over the last several years:


  • After one year, the percentage is 31.67
  • Over three years: 21.70 percent
  • 11.67 percent during five years
  • Morningstar has given the FSDPX fund a rating of three stars.


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