Connect with us


This ETF Investment Covers the Economyâ??s Basic Building Blocks

The industries covered in SPDR Materials Select Sector ETF (XLB) provide the inputs needed by a wide variety of other companies. The exchange-traded fund (ETF) holds a span of large companies that initially harvest and process different materials from nature as well as provide other services necessary for more intermediary and consumer-facing companies to function.

All products must begin somewhere; this sector reflects the beginning of the production process for many final goods. Subsectors found in the index this fund tracks include producers of chemicals, metals, paper and construction materials, among others.

View the current price, volume, performance and top 10 holdings of XLB at

The performance of this fund thus far in 2015 has been less than stellar, as it has declined by 5.48%. Though XLB outperformed the S&P at the beginning of the year, it fell behind in June and has not made up the difference since. The dividend yield, at just over 2%, more than covers the 0.14% expense ratio and offers a bit of extra incentive for investors. Currently, XLBâ??s assets managed come to about $2.1 billion.


The top 10 holdings of XLB make up about 67% of its assets. In terms of subsectors, chemical companies are the most important aspect of the sector, as a component of the S&P, by a wide margin. XLBâ??s largest individual holdings are Dow Chemical Co. (DOW), 11.75%; E.I. du Pont Nemours and Co. (DD), 11.52%; Monsanto Co. (MON), 8.02%; LyondellBasell Industries NV (LYB), 7.73%; and Praxair Inc. (PX), 6.28%.

If you believe that the time is coming for this sector to rebound and make up for its underperformance soon, then SPDR Materials Select Sector ETF (XLB) may be a strong way for you to play it.

View the current price, volume, performance and top 10 holdings of XLB at

If you want my advice about buying and selling specific ETFs, including appropriate stop losses, please consider subscribing to my Successful ETF Investing newsletter.

As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an e-mail. You just may see your question answered in a future ETF Talk.

In case you missed it, I encourage you to read my e-letter column from last week about an industrials fund. I also invite you to comment in the space provided below.

Written By

Doug Fabian is the editor of Successful Investing and High Monthly Income, and is the host of the syndicated radio show, "Doug Fabian's Wealth Strategies." Taking over the reigns from his dad, Dick Fabian, back in 1992, Doug has continued to uphold the reputation of the newsletter as the #1 risk-adjusted market timer as ranked by Hulbertâ??s Investment Digest. For more than 30 years, Successful Investing (formerly the Telephone Switch Newsletter) has produced double-digit annual gains. Doug has become known for his expert knowledge and timely use of innovative tools like Exchange Traded Funds, bear funds and Enhanced Index funds to profit in any market climate.