Launched on January 26, 2004, the Vanguard Materials ETF (VAW Quick QuoteVAW - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Materials - Broad segment of the equity market.

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 13, placing it in bottom 19%.

Index Details

The fund is sponsored by Vanguard. It has amassed assets over $2.83 billion, making it one of the larger ETFs attempting to match the performance of the Materials - Broad segment of the equity market. VAW seeks to match the performance of the MSCI US Investable Market Materials 25/50 Index before fees and expenses.

The MSCI US Investable Market Materials 25/50 Index includes stocks of U.S. companies within the materials sector.

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 0.09%, making it one of the least expensive products in the space.

It has a 12-month trailing dividend yield of 1.59%.

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) accounts for about 16.17% of total assets, followed by Sherwin-williams Co/the (SHW) and Newmont Corp (NEM).

The top 10 holdings account for about 47.95% of total assets under management.

Performance and Risk

Year-to-date, the Vanguard Materials ETF has added roughly 10.69% so far, and was up about 0.67% over the last 12 months (as of 10/06/2025). VAW has traded between $163.82 and $215.21 in this past 52-week period.

The ETF has a beta of 1.06 and standard deviation of 18.37% for the trailing three-year period, making it a medium risk choice in the space. With about 111 holdings, it effectively diversifies company-specific risk.

Alternatives

Vanguard Materials 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, VAW is a sufficient 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.

FlexShares Morningstar Global Upstream Natural Resources ETF (GUNR) tracks Morningstar Global Upstream Natural Resources Index and the Materials Select Sector SPDR ETF (XLB) tracks Materials Select Sector Index. FlexShares Morningstar Global Upstream Natural Resources ETF has $5.30 billion in assets, Materials Select Sector SPDR ETF has $5.53 billion. GUNR has an expense ratio of 0.46%, and XLB charges 0.08%.

Bottom Line

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