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Materials ETF (IYM) Hits New 52-Week High

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For investors seeking momentum, iShares U.S. Basic Materials ETF (IYM - Free Report) is probably on the radar. The fund just hit a 52-week high and is up 23.4% from its 52-week low price of $121.75/share.

But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea of where it might be headed:

IYM in Focus

This product offers exposure to U.S. companies involved in the production of raw materials, including metals, chemicals and forestry products. It has key holdings in specialty chemicals, steel, commodity chemicals, copper and gold. The ETF charges 41 basis points in annual fees (see: all the Materials ETFs here).

Why the Move?

The materials sector has been an area to watch lately, given an ongoing war in Ukraine coupled with rising prices. The tensions have resulted in supply disruption fears in an already-tight commodity market, pushing the prices up. Russia is a commodities powerhouse and a key supplier of energy, metals and Agri. As prices of various materials have been on the surge, the material sector has been witnessing solid growth. Additionally, a tight policy means solid economic growth, which in turn results in higher demand for materials.

More Gains Ahead?

Currently, IYM has a Zacks ETF Rank #3 (Hold) with a High-risk outlook, suggesting that the outperformance could continue in the months ahead. However, many spaces that make up this ETF have a strong Zacks Industry Rank. So, there is definitely some promise for those who want to ride this surging ETF a little further.


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