Should You Invest in the State Street Materials Select Sector SPDR ETF (XLB)?

The State Street Materials Select Sector SPDR ETF (XLB) was launched on December 16, 1998, 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 3, placing it in top 19%.Index DetailsThe fund is sponsored by State Street Investment Management. It has amassed assets over $8.16 billion, making it one of the largest ETFs attempting to match the performance of the Materials - Broad segment of the equity market. XLB seeks to match the performance of the Materials Select Sector Index before fees and expenses.The Materials Select Sector Index seeks to provide an effective representation of the materials sector of the S&P 500 Index.CostsSince cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.Annual operating expenses for this ETF are 0.08%, making it the least expensive product in the space.It has a 12-month trailing dividend yield of 1.67%.Sector Exposure and Top HoldingsEven though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that 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 14.06% of total assets, followed by Newmont Corp (NEM) and Freeport Mcmoran Inc (FCX).The top 10 holdings account for about 59.78% of total assets under management.Performance and RiskThe ETF has added roughly 13.06% so far this year and was up about 19.48% in the last one year (as of 06/24/2026). In that past 52-week period, it has traded between $42.23 and $53.62.The ETF has a beta of 0.91 and standard deviation of 16.89% for the trailing three-year period, making it a medium risk choice in the space. With about 29 holdings, it has more concentrated exposure than peers.AlternativesState Street Materials Select Sector SPDR ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, XLB is an outstanding 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 SPDR S&P Metals & Mining ETF (XME) tracks S&P Metals & Mining Select Industry Index and the FlexShares Morningstar Global Upstream Natural Resources ETF (GUNR) tracks Morningstar Global Upstream Natural Resources Index. State Street SPDR S&P Metals & Mining ETF has $4.60 billion in assets, FlexShares Morningstar Global Upstream Natural Resources ETF has $6.80 billion. XME has an expense ratio of 0.35%, and GUNR charges 0.46%.Bottom LineTo 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.Boost Your Portfolio with Our Top ETF InsightsZacks' exclusive Fund Newsletter delivers actionable information, top news and analysis, as well as top-performing ETFs, straight to your inbox every week.Don’t miss out on this valuable resource. It’s free!Get it now >>This article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks