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Should You Invest in the Materials Select Sector SPDR ETF (XLB)?
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If you're interested in broad exposure to the Materials - Broad segment of the equity market, look no further than the Materials Select Sector SPDR ETF (XLB - Free Report) , a passively managed exchange traded fund launched on 12/16/1998.
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.
Sector ETFs also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. Materials - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 7, placing it in top 44%.
Index Details
The fund is sponsored by State Street Global Advisors. It has amassed assets over $8.22 billion, making it one of the largest ETFs attempting to match the performance of the Materials - Broad segment of the equity market. XLB seeks to match the performance of the Materials Select Sector Index before fees and expenses.
The Materials Select Sector Index seeks to provide an effective representation of the materials sector of the S&P 500 Index.
Costs
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.12%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.63%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Materials sector--about 100% of the portfolio.
Looking at individual holdings, Linde Plc (LIN - Free Report) accounts for about 17.06% of total assets, followed by Sherwin-Williams Company (SHW - Free Report) and Air Products And Chemicals Inc. (APD - Free Report) .
The top 10 holdings account for about 63.07% of total assets under management.
Performance and Risk
So far this year, XLB return is roughly 27.87%, and is up about 27.14% in the last one year (as of 12/31/2021). During this past 52-week period, the fund has traded between $70.64 and $90.53.
The ETF has a beta of 1.06 and standard deviation of 25.84% for the trailing three-year period, making it a medium risk choice in the space. With about 30 holdings, it has more concentrated exposure than peers.
Alternatives
Materials Select Sector SPDR ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, XLB is an outstanding option for investors seeking exposure to the Materials ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
Vanguard Materials ETF (VAW - Free Report) tracks MSCI US Investable Market Materials 25/50 Index and the FlexShares Morningstar Global Upstream Natural Resources ETF (GUNR - Free Report) tracks Morningstar Global Upstream Natural Resources Index. Vanguard Materials ETF has $4.12 billion in assets, FlexShares Morningstar Global Upstream Natural Resources ETF has $6.57 billion. VAW has an expense ratio of 0.10% and GUNR charges 0.46%.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Should You Invest in the Materials Select Sector SPDR ETF (XLB)?
If you're interested in broad exposure to the Materials - Broad segment of the equity market, look no further than the Materials Select Sector SPDR ETF (XLB - Free Report) , a passively managed exchange traded fund launched on 12/16/1998.
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.
Sector ETFs also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. Materials - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 7, placing it in top 44%.
Index Details
The fund is sponsored by State Street Global Advisors. It has amassed assets over $8.22 billion, making it one of the largest ETFs attempting to match the performance of the Materials - Broad segment of the equity market. XLB seeks to match the performance of the Materials Select Sector Index before fees and expenses.
The Materials Select Sector Index seeks to provide an effective representation of the materials sector of the S&P 500 Index.
Costs
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.12%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.63%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Materials sector--about 100% of the portfolio.
Looking at individual holdings, Linde Plc (LIN - Free Report) accounts for about 17.06% of total assets, followed by Sherwin-Williams Company (SHW - Free Report) and Air Products And Chemicals Inc. (APD - Free Report) .
The top 10 holdings account for about 63.07% of total assets under management.
Performance and Risk
So far this year, XLB return is roughly 27.87%, and is up about 27.14% in the last one year (as of 12/31/2021). During this past 52-week period, the fund has traded between $70.64 and $90.53.
The ETF has a beta of 1.06 and standard deviation of 25.84% for the trailing three-year period, making it a medium risk choice in the space. With about 30 holdings, it has more concentrated exposure than peers.
Alternatives
Materials Select Sector SPDR ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, XLB is an outstanding option for investors seeking exposure to the Materials ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
Vanguard Materials ETF (VAW - Free Report) tracks MSCI US Investable Market Materials 25/50 Index and the FlexShares Morningstar Global Upstream Natural Resources ETF (GUNR - Free Report) tracks Morningstar Global Upstream Natural Resources Index. Vanguard Materials ETF has $4.12 billion in assets, FlexShares Morningstar Global Upstream Natural Resources ETF has $6.57 billion. VAW has an expense ratio of 0.10% and GUNR charges 0.46%.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.