Designed to provide broad exposure to the Materials - Broad segment of the equity market, the iShares U.S. Basic Materials ETF (IYM Quick QuoteIYM - Free Report) is a passively managed exchange traded fund launched on June 12, 2000.

Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.

Sector ETFs are also funds of convenience, offering many 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 7, placing it in top 44%.

Index Details

The fund is sponsored by Blackrock. It has amassed assets over $1.39 billion, making it one of the larger ETFs attempting to match the performance of the Materials - Broad segment of the equity market. IYM seeks to match the performance of the Dow Jones U.S. Basic Materials Index before fees and expenses.

The Russell 1000 Basic Materials RIC 22.5/45 Capped Gross Index measures the performance of the basic materials sector of the U.S. equity market.

Costs

Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.

Annual operating expenses for this ETF are 0.38%, making it one of the cheaper products in the space.

It has a 12-month trailing dividend yield of 1.33%.

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 89.2% of the portfolio, followed by Industrials.

Looking at individual holdings, Linde Plc (LIN) accounts for about 18.7% of total assets, followed by Newmont (NEM) and Freeport Mcmoran Inc (FCX).

The top 10 holdings account for about 66.67% of total assets under management.

Performance and Risk

So far this year, IYM has gained about 13.35%, and it's up approximately 30.66% in the last one year (as of 03/17/2026). During this past 52-week period, the fund has traded between $116.16 and $189.59.

The ETF has a beta of 1.02 and standard deviation of 17.55% for the trailing three-year period, making it a high risk choice in the space. With about 42 holdings, it has more concentrated exposure than peers.

Alternatives

iShares U.S. Basic Materials 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, IYM is an excellent 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.

State Street Materials Select Sector SPDR ETF (XLB) tracks Materials Select Sector Index and the FlexShares Morningstar Global Upstream Natural Resources ETF (GUNR) tracks Morningstar Global Upstream Natural Resources Index. State Street Materials Select Sector SPDR ETF has $6.55 billion in assets, FlexShares Morningstar Global Upstream Natural Resources ETF has $7.31 billion. XLB has an expense ratio of 0.08%, and GUNR charges 0.46%.

Bottom Line

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