Designed to provide broad exposure to the Materials - Broad segment of the equity market, the iShares U.S. Basic Materials ETF (IYM) is a passively managed exchange traded fund launched on June 12, 2000.
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 14, placing it in bottom 13%.
Index Details
The fund is sponsored by Blackrock. It has amassed assets over $1.15 billion, making it one of the larger 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
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 0.38%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 1.31%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Materials sector -- about 87.8% of the portfolio, followed by Industrials.
Looking at individual holdings, Linde Plc (LIN) accounts for about 20.22% of total assets, followed by Newmont (NEM) and Freeport Mcmoran Inc (FCX).The top 10 holdings account for about 66.39% of total assets under management.
Performance and Risk
The ETF has gained about 16.6% and was up about 22.49% so far this year and in the past one year (as of 07/23/2026), respectively. IYM has traded between $138.95 and $189.59 during this last 52-week period.
The ETF has a beta of 0.96 and standard deviation of 18.15% for the trailing three-year period, making it a high risk choice in the space. With about 42 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 reasonable 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) tracks Morningstar Global Upstream Natural Resources Index and the State Street Materials Select Sector SPDR ETF (XLB) tracks Materials Select Sector Index. FlexShares Morningstar Global Upstream Natural Resources ETF has $7.22 billion in assets, State Street Materials Select Sector SPDR ETF has $8.43 billion. GUNR has an expense ratio of 0.46%, and XLB charges 0.08%.
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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iShares U.S. Basic Materials ETF (IYM): ETF Research Reports
This article originally published on Zacks Investment Research (zacks.com).