Launched on 06/12/2000, the iShares U.S. Basic Materials ETF (IYM) is a passively managed exchange traded fund designed to provide a 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.

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 10, placing it in bottom 38%.

Index Details

The fund is sponsored by Blackrock. It has amassed assets over $586.54 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 0.39%, making it one of the cheaper products in the space.

It has a 12-month trailing dividend yield of 1.56%.

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 93.10% of the portfolio.

Looking at individual holdings, Linde Plc (LIN) accounts for about 21.48% of total assets, followed by Freeport Mcmoran Inc (FCX) and Air Products And Chemicals Inc (APD).

The top 10 holdings account for about 64.95% of total assets under management.

Performance and Risk

So far this year, IYM return is roughly 8.45%, and is up about 24.59% in the last one year (as of 10/30/2024). During this past 52-week period, the fund has traded between $122.22 and $153.25.

The ETF has a beta of 1.13 and standard deviation of 20.46% for the trailing three-year period, making it a high risk choice in the space. With about 40 holdings, it has more concentrated exposure than peers.