If you're interested in broad exposure to the Materials - Broad segment of the equity market, look no further than the iShares U.S. Basic Materials ETF (IYM), a passively managed exchange traded fund launched on June 12, 2000.

An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.

Additionally, sector ETFs offer convenient 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 15, placing it in bottom 6%.

Index Details

The fund is sponsored by Blackrock. It has amassed assets over $1.08 billion, 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

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 0.38%, making it one of the cheaper products in the space.

It has a 12-month trailing dividend yield of 1.27%.

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 89.3% of the portfolio, followed by Industrials.

Looking at individual holdings, Linde Plc (LIN) accounts for about 19.01% of total assets, followed by Newmont (NEM) and Freeport Mcmoran Inc (FCX).

The top 10 holdings account for about 67.71% of total assets under management.

Performance and Risk

The ETF has added about 18.88% and it's up approximately 23.23% so far this year and in the past one year (as of 09/22/2026), respectively. IYM has traded between $139.22 and $196.45 during this last 52-week period.

The ETF has a beta of 0.98 and standard deviation of 18.38% for the trailing three-year period, making it a high risk choice in the space. With about 43 holdings, it has more concentrated exposure than peers.

Alternatives

iShares U.S. Basic Materials ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, IYM is a sufficient option for those seeking exposure to the Materials ETFs area of the market. Investors might also want to consider some other ETF options in the space.

Northern Trust Mrngstr Glob Upstream Natural Resources ETF (GUNR) tracks Morningstar Global Upstream Natural Resources Index and the State Street Materials Select Sector SPDR ETF (XLB) tracks Materials Select Sector Index. Northern Trust Mrngstr Glob Upstream Natural Resources ETF has $7.05 billion in assets, State Street Materials Select Sector SPDR ETF has $8.17 billion. GUNR has an expense ratio of 0.46%, and XLB charges 0.08%.

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 Reports

This article originally published on Zacks Investment Research (zacks.com).

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