If you’re looking for exposure to the Materials – Broad segment of the equity market, consider the Materials Select Sector SPDR ETF (XLB). This passively managed exchange traded fund was launched on 12/16/1998 and has become a popular option among both retail and institutional investors.
Passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency, making them great vehicles for long-term investors. Sector ETFs like XLB provide convenient ways to gain diversified exposure to specific sectors. The Materials – Broad sector is ranked 13 out of 16 Zacks sectors, placing it in the bottom 19%.
Sponsored by State Street Global Advisors, XLB has over $5.82 billion in assets, making it one of the largest ETFs in the Materials – Broad segment. The fund seeks to match the performance of the Materials Select Sector Index before fees and expenses, which represents the materials sector of the S&P 500 Index.
With an annual operating expense of 0.09%, XLB is one of the least expensive products in its space. The ETF has a 12-month trailing dividend yield of 1.87%.
XLB has the heaviest allocation in the Materials sector, with about 100% of its portfolio invested in this sector. The top holdings include Linde Plc, Sherwin Williams Co/the, and Freeport Mcmoran Inc, which account for about 65.83% of total assets.
Performance-wise, XLB has gained approximately 7.23% year-to-date and 21.22% in the past year. The ETF has a beta of 1.09 and a standard deviation of 19.52% for the trailing three-year period, making it a medium-risk choice with more concentrated exposure than its peers.
For investors seeking exposure to Materials ETFs, XLB is a good option with a Zacks ETF Rank of 2 (Buy). There are also alternative ETFs in the space like SPDR S&P Global Natural Resources ETF (GNR) and FlexShares Morningstar Global Upstream Natural Resources ETF (GUNR) to consider.
To learn more about XLB and other ETFs, visit the Zacks ETF Center. Stay informed with the latest recommendations from Zacks Investment Research.