Should You Invest in the iShares U.S. Basic Materials ETF (IYM)?

Core Insights - The iShares U.S. Basic Materials ETF (IYM) is a passively managed ETF that provides broad exposure to the Materials sector, appealing to both retail and institutional investors due to its low costs and tax efficiency [1][3]. Fund Overview - The ETF is sponsored by Blackrock and has assets exceeding $564.22 million, positioning it as an average-sized ETF in the Materials sector [3]. - IYM aims to replicate the performance of the Dow Jones U.S. Basic Materials Index, with a focus on the basic materials sector of the U.S. equity market [3]. Cost Structure - The annual operating expense ratio for IYM is 0.39%, making it one of the more affordable options in the ETF space [4]. - The ETF has a 12-month trailing dividend yield of 1.44% [4]. Sector Exposure and Holdings - Approximately 90.5% of IYM's portfolio is allocated to the Materials sector, with Linde Plc (LIN) representing about 22.21% of total assets, followed by Newmont (NEM) and Ecolab Inc (ECL) [5]. - The top 10 holdings constitute around 67.15% of total assets under management [6]. Performance Metrics - As of September 8, 2025, IYM has gained approximately 15.17% year-to-date and 7.39% over the past year, with a trading range between $116.16 and $153.25 in the last 52 weeks [7]. - The ETF has a beta of 1.06 and a standard deviation of 19.17% over the trailing three-year period, indicating a higher risk profile compared to peers [7]. Alternatives - IYM holds a Zacks ETF Rank of 3 (Hold), suggesting it is a viable option for investors seeking exposure to the Materials sector [8]. - Other alternatives include the FlexShares Morningstar Global Upstream Natural Resources ETF (GUNR) and the Materials Select Sector SPDR ETF (XLB), with GUNR having $4.98 billion in assets and XLB at $5.50 billion [9].