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.
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are 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 10, placing it in bottom 38%.
Index Details
The fund is sponsored by Blackrock. It has amassed assets over $897.89 million, 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
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 0.38%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 1.41%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Materials sector -- about 89% of the portfolio, followed by Industrials.
Looking at individual holdings, Linde Plc (LIN) accounts for about 18.57% of total assets, followed by Newmont (NEM) and Ecolab Inc (ECL).
The top 10 holdings account for about 63.48% of total assets under management.
Performance and Risk
The ETF has gained about 7.13% so far this year and it's up approximately 28.17% in the last one year (as of 01/12/2026). In that past 52-week period, it has traded between $116.16 and $164.94.
The ETF has a beta of 1.04 and standard deviation of 17.52% 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 holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, IYM is an excellent option for investors seeking exposure to the Materials ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
State Street Materials Select Sector SPDR ETF (XLB) tracks Materials Select Sector Index and the FlexShares Morningstar Global Upstream Natural Resources ETF (GUNR) tracks Morningstar Global Upstream Natural Resources Index. State Street Materials Select Sector SPDR ETF has $5.92 billion in assets, FlexShares Morningstar Global Upstream Natural Resources ETF has $5.92 billion. XLB has an expense ratio of 0.08%, and GUNR charges 0.46%.
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 ReportsThis article originally published on Zacks Investment Research (zacks.com).
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