Looking for broad exposure to the Materials - Broad segment of the equity market? You should consider the Vanguard Materials Index Fund ETF Shares (VAW), a passively managed exchange traded fund launched on January 26, 2004.
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.
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 14, placing it in bottom 13%.
Index Details
The fund is sponsored by Vanguard. It has amassed assets over $3.07 billion, making it one of the larger 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 0.09%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.35%.
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 100% of the portfolio.
Looking at individual holdings, Linde Plc (LIN) accounts for about 14.06% of total assets, followed by Newmont Corp (NEM) and Freeport-mcmoran Inc (FCX).The top 10 holdings account for about 43.46% of total assets under management.
Performance and Risk
The ETF return is roughly 14.19% and it's up approximately 38.63% so far this year and in the past one year (as of 04/13/2026), respectively. VAW has traded between $175.02 and $244.13 during this last 52-week period.
The ETF has a beta of 1.03 and standard deviation of 17.35% for the trailing three-year period, making it a medium risk choice in the space. With about 116 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard Materials Index Fund ETF Shares 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 outstanding 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.
State Street Materials Select Sector SPDR ETF (XLB) tracks Materials Select Sector Index and the FlexShares Morningstar Global Upstream Natural Resources ETF (GUNR) tracks Morningstar Global Upstream Natural Resources Index. State Street Materials Select Sector SPDR ETF has $7.01 billion in assets, FlexShares Morningstar Global Upstream Natural Resources ETF has $7.64 billion. XLB has an expense ratio of 0.08%, 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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Vanguard Materials Index Fund ETF Shares (VAW): ETF Research Reports
This article originally published on Zacks Investment Research (zacks.com).