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 Quick QuoteXLB - Free Report) , a passively managed exchange traded fund launched on December 16, 1998.

Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.

Investor-friendly, sector ETFs provide many options 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 10, placing it in bottom 38%.

Index Details

The fund is sponsored by State Street Investment Management. It has amassed assets over $5.26 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

When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.

Annual operating expenses for this ETF are 0.08%, making it the least expensive product in the space.

It has a 12-month trailing dividend yield of 1.93%.

Sector Exposure and Top Holdings

ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many 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) accounts for about 15.91% of total assets, followed by Sherwin Williams Co/the (SHW) and Newmont Corp (NEM).

The top 10 holdings account for about 58.8% of total assets under management.

Performance and Risk

Year-to-date, the Materials Select Sector SPDR ETF has gained about 6.01% so far, and it's up approximately 1.61% over the last 12 months (as of 08/11/2025). XLB has traded between $74.27 and $97.63 in this past 52-week period.

The ETF has a beta of 1.00 and standard deviation of 18.68% for the trailing three-year period, making it a medium risk choice in the space. With about 29 holdings, it has more concentrated exposure than peers.

Alternatives

Materials Select Sector SPDR ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, XLB is a good option for those seeking exposure to the Materials ETFs area of the market. Investors might also want to consider some other ETF options in the space.

SPDR S&P Global Natural Resources ETF (GNR) tracks S&P Global Natural Resources Index and the FlexShares Morningstar Global Upstream Natural Resources ETF (GUNR) tracks Morningstar Global Upstream Natural Resources Index. SPDR S&P Global Natural Resources ETF has $3.26 billion in assets, FlexShares Morningstar Global Upstream Natural Resources ETF has $4.86 billion. GNR has an expense ratio of 0.4%, and GUNR charges 0.46%.

Bottom Line

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