Equity: U.S. Basic Materials
With 9 ETFs and over $13.85B in combined AUM, the Equity: U.S. Basic Materials segment provides exposure to the U.S. space with a focus on Basic Materials securities.
Year-to-date, the best-performing ETF in the segment is the Invesco DWA Basic Materials Momentum ETF (PYZ), with a total return of 23.20%. Meanwhile, the most popular ETF is the Materials Select Sector SPDR Fund (XLB) with $8.07BB in assets under management.
Investors should take a look at the Vanguard Materials ETF (VAW). This fund has been chosen as an Analyst Pick by FactSet, thus is the best ETF for the average investor. VAW tracks a very broad market-cap-weighted index of US materials companies. VAW has an expense ratio of 0.10% and tracks the MSCI US Investable Market Materials 25/50 Index.
ETF.com Efficiency Insight
The average efficiency score in the Equity: U.S. Basic Materials segment is 91 out of 100, with the Fidelity MSCI Materials Index ETF(FMAT) obtaining the highest rating of 99 out of 100.
Costs dominate the discussion around efficiency. ETFs in the segment have an average expense ratio of 0.34% per year, with the Fidelity MSCI Materials Index ETF (FMAT) having the lowest expense ratio, charging investors 0.08% yearly.
Investors should look for funds with tight tracking, such as the Materials Select Sector SPDR Fund (XLB), with a 12-month median tracking difference of -0.01%.
ETF.com Tradability Insight
The average tradability score in the Equity: U.S. Basic Materials segment is 87 out of 100, with the Materials Select Sector SPDR Fund(XLB) obtaining the highest rating of 99 out of 100.
The Materials Select Sector SPDR Fund (XLB) is the undisputed segment leader when it comes to liquidity. The fund trades 535.08M in daily average volume. Investors should also find ample liquidity in the Vanguard Materials ETF (VAW), with $27.81M in daily dollar volume.
Use limit orders to trade funds such as the Invesco S&P SmallCap Materials ETF(PSCM), due to their double-digit market spreads.
ETF.com Fit Insight
The Thomson Reuters US Basic Materials has been selected as the index that most accurately represents the market in question. The benchmark has been selected by the ETF Analytics team at FactSet, according to a series of guidelines to ensure this index accurately captures its market.
Investors trying to match a broad market exposure should pay attention to FMAT. This fund obtains a high Fit score and investors should capture market-like returns.
Other funds diverge from the market, by nature of their investment mandates; for example, PSCM follows a Vanilla strategy and obtains a low Fit score compared with our neutral benchmark.