We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Should You Invest in the Vanguard Materials ETF (VAW)?
Read MoreHide Full Article
Designed to provide broad exposure to the Materials - Broad segment of the equity market, the Vanguard Materials ETF (VAW - Free Report) is a passively managed exchange traded fund launched on 01/26/2004.
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
Investor-friendly, sector ETFs provide many options 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 15, placing it in bottom 6%.
Index Details
The fund is sponsored by Vanguard. It has amassed assets over $3.07 billion, making it one of the largest 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
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for this ETF are 0.10%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.53%.
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 99.90% of the portfolio.
Looking at individual holdings, Linde Plc (LIN - Free Report) accounts for about 15.56% of total assets, followed by Sherwin-Williams Co/the (SHW - Free Report) and Freeport-Mcmoran Inc (FCX - Free Report) .
The top 10 holdings account for about 44.12% of total assets under management.
Performance and Risk
Year-to-date, the Vanguard Materials ETF has added roughly 12.16% so far, and was up about 20.78% over the last 12 months (as of 11/25/2024). VAW has traded between $177.66 and $215.21 in this past 52-week period.
The ETF has a beta of 1.10 and standard deviation of 19.80% for the trailing three-year period, making it a medium risk choice in the space. With about 121 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard 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, VAW 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.
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 $5.59 billion in assets, Materials Select Sector SPDR ETF has $6.04 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.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Should You Invest in the Vanguard Materials ETF (VAW)?
Designed to provide broad exposure to the Materials - Broad segment of the equity market, the Vanguard Materials ETF (VAW - Free Report) is a passively managed exchange traded fund launched on 01/26/2004.
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
Investor-friendly, sector ETFs provide many options 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 15, placing it in bottom 6%.
Index Details
The fund is sponsored by Vanguard. It has amassed assets over $3.07 billion, making it one of the largest 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
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for this ETF are 0.10%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.53%.
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 99.90% of the portfolio.
Looking at individual holdings, Linde Plc (LIN - Free Report) accounts for about 15.56% of total assets, followed by Sherwin-Williams Co/the (SHW - Free Report) and Freeport-Mcmoran Inc (FCX - Free Report) .
The top 10 holdings account for about 44.12% of total assets under management.
Performance and Risk
Year-to-date, the Vanguard Materials ETF has added roughly 12.16% so far, and was up about 20.78% over the last 12 months (as of 11/25/2024). VAW has traded between $177.66 and $215.21 in this past 52-week period.
The ETF has a beta of 1.10 and standard deviation of 19.80% for the trailing three-year period, making it a medium risk choice in the space. With about 121 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard 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, VAW 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.
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 $5.59 billion in assets, Materials Select Sector SPDR ETF has $6.04 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.