The Vanguard Materials Index Fund ETF Shares (VAW Quick QuoteVAW - Free Report) was launched on January 26, 2004, and is a passively managed exchange traded fund designed to offer broad exposure to the Materials - Broad segment of the equity market.

While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.

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 4, placing it in top 25%.

Index Details

The fund is sponsored by Vanguard. It has amassed assets over $3.13 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

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

It has a 12-month trailing dividend yield of 1.34%.

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 100% of the portfolio.

Looking at individual holdings, Linde Plc (LIN) accounts for about 15.14% of total assets, followed by Newmont Corp (NEM) and Freeport-mcmoran Inc (FCX).

The top 10 holdings account for about 37.94% of total assets under management.

Performance and Risk

The ETF has gained about 15% so far this year and was up about 24.14% in the last one year (as of 06/17/2026). In that past 52-week period, it has traded between $190.36 and $244.13.

The ETF has a beta of 0.96 and standard deviation of 17.59% for the trailing three-year period, making it a medium risk choice in the space. With about 115 holdings, it effectively diversifies company-specific risk.

Alternatives

Vanguard Materials Index Fund ETF Shares 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, VAW 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.

FlexShares Morningstar Global Upstream Natural Resources ETF (GUNR) tracks Morningstar Global Upstream Natural Resources Index and the State Street Materials Select Sector SPDR ETF (XLB) tracks Materials Select Sector Index. FlexShares Morningstar Global Upstream Natural Resources ETF has $7.19 billion in assets, State Street Materials Select Sector SPDR ETF has $8.09 billion. GUNR has an expense ratio of 0.46%, and XLB charges 0.08%.

Bottom Line

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