JNL/Mellon Materials Sector Fund Aims to Track Key U.S. Basic Materials Index

The fund targets the materials sector with a strategy that balances market exposure and competitive costs.

October 23, 2024

JNL/Mellon Materials Sector Fund Focuses on Key Industries

The JNL/Mellon Materials Sector Fund, managed by Jackson National Life Insurance Company, focuses on providing investors with exposure to the U.S. materials sector, specifically industries such as chemicals, building materials, and paper products. According to the fund's prospectus, the strategy involves replicating the Morningstar US Basic Materials Index, with at least 80% of the fund’s assets invested in the index's constituent companies.

The fund is designed for those seeking to capture the growth potential of essential industries that drive economic development. Its focus on basic materials offers a niche opportunity for investors interested in sector-specific exposure, particularly in industries that form the backbone of manufacturing and infrastructure.

Competitive Fee Structure

One of the fund's advantages is its cost structure. The JNL/Mellon Materials Sector Fund offers two classes of shares with differing expense ratios. Class A shares have a 0.67% expense ratio, while Class I shares benefit from a lower rate of 0.32%, thanks to a fee waiver provided by Jackson National Asset Management. Over the long term, these fee differences can translate into significant savings for investors.

Risk Considerations and Outlook

As with any sector-focused fund, investing in the JNL/Mellon Materials Sector Fund comes with its own set of risks. Because the fund is concentrated in the materials sector, it is subject to greater risk compared to more diversified funds. Economic factors affecting the materials industry, such as fluctuating commodity prices or changes in demand, could significantly impact returns.

With its focus on replicating the Morningstar US Basic Materials Index, the JNL/Mellon Materials Sector Fund provides a unique investment opportunity in an often-overlooked segment of the market. By focusing on companies involved in the production of essential materials, the fund offers a direct way to participate in the economic growth driven by industrial and manufacturing sectors.