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The iShares U.S. Basic Materials ETF (IYM) was launched on 06/12/2000, and is a passively managed exchange traded fund designed to offer broad exposure to the Materials - Broad segment of the equity market.
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.
Sector ETFs are also funds of convenience, offering many 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 12, placing it in bottom 25%.
Index Details
The fund is sponsored by Blackrock. It has amassed assets over $508.66 million, making it one of the average sized 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
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.39%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 1.64%.
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 92.40% of the portfolio.
Looking at individual holdings, Linde Plc (LIN) accounts for about 21.11% of total assets, followed by Air Products And Chemicals Inc (APD) and Freeport Mcmoran Inc (FCX).
The top 10 holdings account for about 65.48% of total assets under management.
Performance and Risk
So far this year, IYM has lost about -3.79%, and is down about -4.78% in the last one year (as of 12/30/2024). During this past 52-week period, the fund has traded between $129.84 and $153.25.
The ETF has a beta of 1.12 and standard deviation of 20.26% for the trailing three-year period, making it a high risk choice in the space. With about 40 holdings, it has more concentrated exposure than peers.