If you're interested in broad exposure to the Materials - Broad segment of the equity market, look no further than the Vanguard Materials ETF (VAW), a passively managed exchange traded fund launched on January 26, 2004.
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
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 2, placing it in top 13%.
Index Details
The fund is sponsored by Vanguard. It has amassed assets over $3.14 billion, making it one of the larger ETFs attempting to match the performance of the Materials - Broad segment of the equity market. VAW seeks to match the performance of the MSCI US Investable Market Materials 25/50 Index before fees and expenses.
The MSCI US Investable Market Materials 25/50 Index includes stocks of U.S. companies within the materials sector.
Costs
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.09%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.34%.
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 100% of the portfolio.
Looking at individual holdings, Linde Plc (LIN) accounts for about 14.27% of total assets, followed by Newmont Corp (NEM) and Crh Plc (CRH).
The top 10 holdings account for about 47.32% of total assets under management.
Performance and Risk
The ETF has gained about 15.86% so far this year and is up about 23.32% in the last one year (as of 02/11/2026). In that past 52-week period, it has traded between $163.82 and $240.46.
The ETF has a beta of 1.05 and standard deviation of 17.33% for the trailing three-year period, making it a medium risk choice in the space. With about 116 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard 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, VAW is a great 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 $6.83 billion in assets, FlexShares Morningstar Global Upstream Natural Resources ETF has $6.97 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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Vanguard Materials ETF (VAW): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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