Designed to provide broad exposure to the Materials - Broad segment of the equity market, the Materials Select Sector SPDR ETF (XLB - Free Report) is 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.
Additionally, sector ETFs offer convenient ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Materials - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 5, placing it in top 31%.
Index Details
The fund is sponsored by State Street Global Advisors. It has amassed assets over $6.28 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 0.10%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 2.23%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. 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 15.50% of total assets, followed by Freeport-Mcmoran Inc. (FCX - Free Report) and Sherwin-Williams Company (SHW - Free Report) .
The top 10 holdings account for about 62.39% of total assets under management.
Performance and Risk
Year-to-date, the Materials Select Sector SPDR ETF has lost about -17.34% so far, and is down about -8.48% over the last 12 months (as of 07/07/2022). XLB has traded between $72.63 and $90.61 in this past 52-week period.
The ETF has a beta of 1.06 and standard deviation of 26.93% 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 2 (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.
SPDR S&P Global Natural Resources ETF (GNR - Free Report) tracks S&P Global Natural Resources Index and the FlexShares Morningstar Global Upstream Natural Resources ETF (GUNR - Free Report) tracks Morningstar Global Upstream Natural Resources Index. SPDR S&P Global Natural Resources ETF has $3.25 billion in assets, FlexShares Morningstar Global Upstream Natural Resources ETF has $7.20 billion. GNR has an expense ratio of 0.40% 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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Designed to provide broad exposure to the Materials - Broad segment of the equity market, the Materials Select Sector SPDR ETF (XLB - Free Report) is 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.
Additionally, sector ETFs offer convenient ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Materials - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 5, placing it in top 31%.
Index Details
The fund is sponsored by State Street Global Advisors. It has amassed assets over $6.28 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 0.10%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 2.23%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. 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 15.50% of total assets, followed by Freeport-Mcmoran Inc. (FCX - Free Report) and Sherwin-Williams Company (SHW - Free Report) .
The top 10 holdings account for about 62.39% of total assets under management.
Performance and Risk
Year-to-date, the Materials Select Sector SPDR ETF has lost about -17.34% so far, and is down about -8.48% over the last 12 months (as of 07/07/2022). XLB has traded between $72.63 and $90.61 in this past 52-week period.
The ETF has a beta of 1.06 and standard deviation of 26.93% 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 2 (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.
SPDR S&P Global Natural Resources ETF (GNR - Free Report) tracks S&P Global Natural Resources Index and the FlexShares Morningstar Global Upstream Natural Resources ETF (GUNR - Free Report) tracks Morningstar Global Upstream Natural Resources Index. SPDR S&P Global Natural Resources ETF has $3.25 billion in assets, FlexShares Morningstar Global Upstream Natural Resources ETF has $7.20 billion. GNR has an expense ratio of 0.40% 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.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.
Get it free >>
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