What Is the XLB ETF? A Complete Guide to Returns, Expense Ratio, Holdings, and Alternative ETFs
The Materials Select Sector SPDR ETF (XLB) offers concentrated exposure to the S&P 500 materials sector, with a focus on chemicals, metals and mining, and construction materials. Its low expense ratio, tendency to benefit in inflationary periods, economic sensitivity, and dividends are the key selection criteria, and comparing its fees with VAW and FMAT is important.
SubscribeWhat Is the Materials Select Sector SPDR ETF?
This is a sector-focused ETF that tracks materials sector companies included in the S&P 500. It lets you hold cyclical basic materials industries such as chemicals, metals and mining, containers and packaging, and construction materials in a single security.
It suits investors who want to overweight the materials sector during periods of rising commodity prices or economic recovery.
It is a passively managed (index-tracking) ETF run by State Street.
How Do You Invest in the Materials Select Sector SPDR ETF?
| Item | Details |
|---|---|
| Tracked Index | Materials Select Sector Index |
| Management Style | Passive (index-tracking) |
| Rebalancing Frequency | Quarterly |
| Dividend Frequency | Quarterly |
| Expense Ratio | 0.08% |
| Issuer | State Street |
The fund replicates the constituents of the Materials Select Sector Index by market-cap weighting, tracking the performance of large US materials companies as a whole. With a heavy weighting in chemicals and metals and mining, changes in index composition are automatically reflected through quarterly rebalancing.
- Direct, low-cost exposure to the S&P 500 materials sector
- Concentration in inflation-sensitive industries such as chemicals and construction materials
Materials Select Sector SPDR ETF Size and Costs (AUM and Expense Ratio)
Assets under management (AUM) stand at $8.4B, and the expense ratio is 0.08% per year.
Unlike broad core ETFs, it is concentrated in a single sector, so volatility tends to be relatively high; its strength is a fee level lower than the category average.
Materials Select Sector SPDR ETF Performance and Trends
1-Year Price Performance
Dividend & Yield
52-Week Price RangeThe materials sector tends to swing widely with the economic cycle and commodity prices, and it has a tendency to show relative strength during inflationary periods and industrial demand recoveries. Short-term movements depend on global economic indicators and commodity prices.
As a cyclical sector, fund flows tend to be volatile depending on the economic outlook. In environments where demand for inflation hedges grows, money sometimes flows into materials and commodity-related ETFs.
Materials Select Sector SPDR ETF Pros and Cons
Its strengths are a low fee and direct exposure to the materials sector, while its weaknesses are the volatility that comes with single-sector concentration and sensitivity to the economic cycle.
💪 Key Strengths
⚠️ Points to Watch
Materials Select Sector SPDR ETF Alternative ETFs and Related Products
VAW and FMAT, shown in the table, are lower-fee, direct substitutes that track the same materials sector, and IYM is a similar ETF with exposure to US basic materials companies. Meanwhile, XME is a variant more focused on metals and mining, so its exposure profile differs, and to narrow down to a chemicals and materials processing theme, you can also consider global materials ETFs such as MXI.
Peer Comparison ETFs| Ticker | Name | Price | Change | AUM | Total Expense Ratio | Dividend Yield | 1Y |
|---|---|---|---|---|---|---|---|
 XME | State Street SPDR S&P Metals & Mining ETF | $97.66 | -0.2% | $3.7B | 0.35% | 0.35% | +1.1% |
 VAW | Vanguard Materials ETF | $232.69 | +1.8% | $3.0B | 0.09% | 1.37% | +19.2% |
 IYM | iShares U.S. Basic Materials ETF | $181.62 | +1.2% | $1.3B | 0.37% | 1.27% | +27.4% |
 FMAT | Fidelity MSCI Materials Index ETF | $59.48 | +1.7% | $599.1M | 0.08% | 1.38% | +19.0% |
 FXZ | First Trust Materials AlphaDEX Fund | $75.27 | +1.1% | $357.4M | 0.64% | 1.37% | +25.3% |
Top Holdings| Ticker | Name | Weight | Price | Change | Market Cap | P/E | Dividend Yield |
|---|---|---|---|---|---|---|---|
| LIN | Linde Plc | 0.28% | $519.72 | +1.1% | $238.6B | 34.5 | 1.23% |
| NEM | Newmont Corp | 0.13% | $109.09 | +2.3% | $113.4B | 12.7 | 0.95% |
| FCX | Freeport-McMoRan Inc | 0.11% | $62.97 | +0.8% | $90.4B | 26.5 | 0.95% |
 CTVA | Corteva Inc | 0.10% | $11.92 | +2.4% | $8.0B | 7.9 | 0.75% |
| SHW | Sherwin-Williams Co | 0.05% | $352.37 | +5.9% | $85.1B | 32.4 | 0.85% |
| ECL | Ecolab Inc | 0.05% | $308.38 | +1.8% | $86.5B | 41.9 | 0.95% |
Materials Select Sector SPDR ETF Investor Checkpoints
Here are the points to review before investing in XLB. It is a low-cost way to gain exposure to the materials sector, but single-sector concentration, economic sensitivity, and currency effects should be checked in advance, together with your own investment profile, before buying.
| Checkpoint | What to Check | Current Status |
|---|---|---|
| 💵 Expense Ratio | Check the cumulative cost impact over long-term holding | Low level |
| 📊 Sector Concentration | Whether you can tolerate single-sector volatility | Concentrated exposure |
| 📈 Economic Phase | Economic cycle and commodity price environment | Needs checking |
| 💱 Exchange Rate | Impact on returns when converted to Korean won | No currency hedge |
Single-sector concentration and economic sensitivity are the main drivers of short-term volatility. During economic slowdowns or periods of falling commodity prices, losses can be larger than with broad core ETFs.
It is a suitable choice for investors who want direct, low-cost exposure to the materials sector. To cut costs further, VAW and FMAT can be alternatives, and to focus on metals and mining, ETFs such as XME can be considered.
SubscribeDisclaimer: This content is for informational purposes only and does not constitute investment advice. All investment responsibility lies with the investor.
This article reflects information as of June 21, 2026.
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