Launched on 12/16/1998, the Materials Select Sector SPDR ETF (XLB) is a passively managed exchange traded fund designed to provide a broad exposure to the Materials - Broad segment of the equity market.

An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.

Additionally, sector ETFs offer convenient 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 10, placing it in bottom 38%.

Index Details

The fund is sponsored by State Street Global Advisors. It has amassed assets over $5.08 billion, making it one of the largest ETFs attempting to match the performance of the Materials - Broad segment of the equity market. XLB seeks to match the performance of the Materials Select Sector Index before fees and expenses.

The Materials Select Sector Index seeks to provide an effective representation of the materials sector of the S&P 500 Index.

Costs

When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.

Annual operating expenses for this ETF are 0.09%, making it one of the least expensive products in the space.

It has a 12-month trailing dividend yield of 1.80%.

Sector Exposure and Top Holdings

While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.

This ETF has heaviest allocation in the Materials sector--about 100% of the portfolio.

Looking at individual holdings, Linde Plc (LIN) accounts for about 21.10% of total assets, followed by Sherwin Williams Co/the (SHW) and Air Products + Chemicals Inc (APD).

The top 10 holdings account for about 67.29% of total assets under management.

Performance and Risk

The ETF has gained about 6.30% and it's up approximately 10.76% so far this year and in the past one year (as of 02/03/2025), respectively. XLB has traded between $80.98 and $97.63 during this last 52-week period.

The ETF has a beta of 1.07 and standard deviation of 18.91% for the trailing three-year period, making it a medium risk choice in the space. With about 31 holdings, it has more concentrated exposure than peers.