What Is the IYM ETF? A Complete Guide to Returns, Expense Ratio, Holdings, and Alternative ETFs
An ETF that invests in large-cap and mid-cap stocks within the US basic materials sector, seeking inflation protection and cyclical growth.
SubscribeWhat Is This ETF?
The fund holds roughly 80 basic materials companies that represent the US market. It is managed with a capped index weighting method designed to prevent excessive concentration in any single stock.
It is a suitable choice for investors who want exposure to the growth of materials companies driven by rising commodity prices or expanding infrastructure investment.
It is a passively managed (index-tracking) ETF launched by iShares in 2000.
How Does It Invest?
| Item | Details |
|---|---|
| Tracking Index | Russell 1000 Basic Materials RIC 22.5/45 Capped Index |
| Management Style | Passive (index-tracking) |
| Number of Holdings | Approximately 80 to 90 |
| Dividend Frequency | Quarterly |
| Expense Ratio | 0.37% |
The fund selects basic materials companies from the Russell 1000 Index and invests on a market-cap-weighted basis, while placing caps on individual holdings to improve portfolio stability. It has a structure with a high weighting in chemicals and specialty materials companies.
- Broad exposure to large-cap and mid-cap materials stocks based on the Russell 1000
- Capping method that limits the weighting of any single giant holding
Size and Costs
Assets under management (AUM) stand at $1.3B, and the expense ratio is 0.37% per year.
Compared with XLB, the flagship sector product, it holds more stocks and therefore offers a more diversified portfolio. Compared with VAW, which also includes small and mid-cap stocks, it shows a more stable character centered on large caps.
Performance and Trends
1-Year Price Performance
Dividend & Yield
52-Week Price RangeThe fund reacts sensitively to shifts in global supply chains and commodity price trends, and it shows particularly strong price elasticity when demand recovers for chemical products and industrial metals such as copper.
Inflows tend to occur as part of sector rotation strategies during periods when demand for inflation hedging builds and expectations rise that government infrastructure investment policies will provide a benefit.
Pros and Cons
Its strength is balanced exposure to a variety of basic materials companies, but a higher expense ratio than competing products and high sensitivity to the economic cycle are risks.
💪 Key Strengths
⚠️ Points to Watch
Alternative ETFs and Related Products
If cost efficiency is a priority, XLB can be a reasonable choice, and if you want to focus only on the more specialized metals and mining areas, XME can be considered as an alternative. Meanwhile, if you want broad diversification that includes small caps within the materials sector, VAW is also worth reviewing.
Peer Comparison ETFs| Ticker | Name | Price | Change | AUM | Total Expense Ratio | Dividend Yield | 1Y |
|---|---|---|---|---|---|---|---|
 XLB | State Street Materials Select Sector SPDR ETF | $52.74 | +0.4% | $8.3B | 0.08% | 1.64% | +22.4% |
 XME | State Street SPDR S&P Metals & Mining ETF | $97.82 | -3.2% | $3.8B | 0.35% | 0.35% | +1.4% |
 VAW | Vanguard Materials ETF | $228.65 | -0.3% | $3.0B | 0.09% | 1.39% | +16.4% |
 FMAT | Fidelity MSCI Materials Index ETF | $58.48 | -0.2% | $603.6M | 0.08% | 1.4% | +16.3% |
 FXZ | First Trust Materials AlphaDEX Fund | $74.48 | -2.1% | $365.5M | 0.64% | 1.38% | +24.0% |
Top Holdings| Ticker | Name | Weight | Price | Change | Market Cap | P/E | Dividend Yield |
|---|---|---|---|---|---|---|---|
| LIN | Linde Plc | 0.40% | $514.24 | +2.2% | $237.1B | 34.2 | 1.25% |
| NEM | Newmont Corp | 0.20% | $106.61 | -4.6% | $110.8B | 12.4 | 0.97% |
| FCX | Freeport-McMoRan Inc | 0.16% | $62.47 | -5.5% | $89.7B | 26.3 | 0.95% |
| ECL | Ecolab Inc | 0.12% | $302.98 | +0.7% | $84.9B | 41.2 | 0.97% |
| APD | Air Products & Chemicals Inc | 0.10% | $316.43 | +1.5% | $70.5B | - | 2.28% |
Investor Checkpoints
These are the points to examine carefully before deciding to invest in IYM. You should compare the long-term cycle of the commodities market and the fund's cost structure against your own investment strategy.
| Checkpoint | What to Check | Current Status |
|---|---|---|
| 💵 Cost Efficiency | Review the long-term impact of a higher fee compared with competing ETFs | On the high side |
| 🏭 Economic Cycle | Check whether the current macroeconomic environment is favorable to the materials industry | Needs checking |
| 📈 Holding Weights | Analyze industry changes and risk factors affecting the top holdings | Ongoing monitoring |
| 🛢️ Commodity Prices | Trends and outlook for the prices of major basic materials | Ongoing monitoring |
The basic materials industry is highly vulnerable to cost volatility and shifts in demand, so you should adjust its weight within your portfolio and take care to manage volatility.
It is a sector investment tool suited to investors who want both the long-term growth potential of US basic materials and an inflation protection effect. However, you need to set an efficient weighting that takes the high management fee into account.
SubscribeDisclaimer: This content is for informational purposes only and does not constitute investment advice. All investment responsibility lies with the investor.
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