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Should You Invest in the iShares U.S. Basic Materials ETF (IYM)?
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Designed to provide broad exposure to the Materials - Broad segment of the equity market, the iShares U.S. Basic Materials ETF (IYM - Free Report) is a passively managed exchange traded fund launched on 06/12/2000.
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 16, placing it in bottom 0%.
Index Details
The fund is sponsored by Blackrock. It has amassed assets over $649.56 million, making it one of the average sized 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
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.40%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 1.70%.
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 92.70% of the portfolio.
Looking at individual holdings, Linde Plc (LIN - Free Report) accounts for about 20.98% of total assets, followed by Freeport Mcmoran Inc (FCX - Free Report) and Ecolab Inc (ECL - Free Report) .
The top 10 holdings account for about 64.07% of total assets under management.
Performance and Risk
Year-to-date, the iShares U.S. Basic Materials ETF has gained about 4.03% so far, and is up roughly 13.38% over the last 12 months (as of 06/25/2024). IYM has traded between $119.29 and $149.03 in this past 52-week period.
The ETF has a beta of 1.16 and standard deviation of 20.67% for the trailing three-year period, making it a high risk choice in the space. With about 43 holdings, it has more concentrated exposure than peers.
Alternatives
IShares U.S. Basic 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, IYM is a reasonable 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.
Materials Select Sector SPDR ETF (XLB - Free Report) tracks Materials Select Sector Index and the FlexShares Morningstar Global Upstream Natural Resources ETF (GUNR - Free Report) tracks Morningstar Global Upstream Natural Resources Index. Materials Select Sector SPDR ETF has $5.43 billion in assets, FlexShares Morningstar Global Upstream Natural Resources ETF has $5.90 billion. XLB has an expense ratio of 0.09% and GUNR charges 0.46%.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Should You Invest in the iShares U.S. Basic Materials ETF (IYM)?
Designed to provide broad exposure to the Materials - Broad segment of the equity market, the iShares U.S. Basic Materials ETF (IYM - Free Report) is a passively managed exchange traded fund launched on 06/12/2000.
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 16, placing it in bottom 0%.
Index Details
The fund is sponsored by Blackrock. It has amassed assets over $649.56 million, making it one of the average sized 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
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.40%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 1.70%.
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 92.70% of the portfolio.
Looking at individual holdings, Linde Plc (LIN - Free Report) accounts for about 20.98% of total assets, followed by Freeport Mcmoran Inc (FCX - Free Report) and Ecolab Inc (ECL - Free Report) .
The top 10 holdings account for about 64.07% of total assets under management.
Performance and Risk
Year-to-date, the iShares U.S. Basic Materials ETF has gained about 4.03% so far, and is up roughly 13.38% over the last 12 months (as of 06/25/2024). IYM has traded between $119.29 and $149.03 in this past 52-week period.
The ETF has a beta of 1.16 and standard deviation of 20.67% for the trailing three-year period, making it a high risk choice in the space. With about 43 holdings, it has more concentrated exposure than peers.
Alternatives
IShares U.S. Basic 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, IYM is a reasonable 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.
Materials Select Sector SPDR ETF (XLB - Free Report) tracks Materials Select Sector Index and the FlexShares Morningstar Global Upstream Natural Resources ETF (GUNR - Free Report) tracks Morningstar Global Upstream Natural Resources Index. Materials Select Sector SPDR ETF has $5.43 billion in assets, FlexShares Morningstar Global Upstream Natural Resources ETF has $5.90 billion. XLB has an expense ratio of 0.09% and GUNR charges 0.46%.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.