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Should You Invest in the iShares U.S. Basic Materials ETF (IYM)?
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Launched on 06/12/2000, the iShares U.S. Basic Materials ETF (IYM - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Materials - Broad segment of the equity market.
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 also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. Materials - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 15, placing it in bottom 6%.
Index Details
The fund is sponsored by Blackrock. It has amassed assets over $588.91 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
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 0.40%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 1.67%.
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 92.40% of the portfolio.
Looking at individual holdings, Linde Plc (LIN - Free Report) accounts for about 23.20% of total assets, followed by Air Products And Chemicals Inc (APD - Free Report) and Freeport Mcmoran Inc (FCX - Free Report) .
The top 10 holdings account for about 66.67% of total assets under management.
Performance and Risk
The ETF has added about 5.88% so far this year and is up roughly 13.49% in the last one year (as of 08/27/2024). In that past 52-week period, it has traded between $119.29 and $149.03.
The ETF has a beta of 1.13 and standard deviation of 20.60% for the trailing three-year period, making it a high risk choice in the space. With about 41 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 good 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 - Free Report) tracks Morningstar Global Upstream Natural Resources Index and the Materials Select Sector SPDR ETF (XLB - Free Report) tracks Materials Select Sector Index. FlexShares Morningstar Global Upstream Natural Resources ETF has $5.69 billion in assets, Materials Select Sector SPDR ETF has $5.72 billion. GUNR has an expense ratio of 0.46% and XLB charges 0.09%.
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)?
Launched on 06/12/2000, the iShares U.S. Basic Materials ETF (IYM - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Materials - Broad segment of the equity market.
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 also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. Materials - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 15, placing it in bottom 6%.
Index Details
The fund is sponsored by Blackrock. It has amassed assets over $588.91 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
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 0.40%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 1.67%.
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 92.40% of the portfolio.
Looking at individual holdings, Linde Plc (LIN - Free Report) accounts for about 23.20% of total assets, followed by Air Products And Chemicals Inc (APD - Free Report) and Freeport Mcmoran Inc (FCX - Free Report) .
The top 10 holdings account for about 66.67% of total assets under management.
Performance and Risk
The ETF has added about 5.88% so far this year and is up roughly 13.49% in the last one year (as of 08/27/2024). In that past 52-week period, it has traded between $119.29 and $149.03.
The ETF has a beta of 1.13 and standard deviation of 20.60% for the trailing three-year period, making it a high risk choice in the space. With about 41 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 good 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 - Free Report) tracks Morningstar Global Upstream Natural Resources Index and the Materials Select Sector SPDR ETF (XLB - Free Report) tracks Materials Select Sector Index. FlexShares Morningstar Global Upstream Natural Resources ETF has $5.69 billion in assets, Materials Select Sector SPDR ETF has $5.72 billion. GUNR has an expense ratio of 0.46% and XLB charges 0.09%.
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.