ETF Research and Analysis
by Alex Bryan
Suitability
Cost-conscious investors should steer clear of iShares Dow Jones US Basic Materials Sector Index IYM, which charges more than twice as much as its closest peers. We would recommend Materials Select Sector SPDR XLB or Vanguard Read more
Cost-conscious investors should steer clear of iShares Dow Jones US Basic Materials Sector Index IYM, which charges more than twice as much as its closest peers. We would recommend Materials Select Sector SPDR XLB or Vanguard Read more
Bull Case
The fund’s holdings in the chemicals industry are reducing their exposure to Europe and shifting their focus up the value chain toward less-cyclical, higher-margin specialty chemicals.
Low natural gas prices are helping the fund’s North American chemical producers.
Renewed strength in the U.S. housing market could increase demand for industrial metals and chemicals. Read more
Bear Case
IYM charges more than twice as much as VAW and XLB, and has exhibited greater volatility.
Many of the fund’s small- and mid-cap holdings lack the competitive advantages their large-cap counterparts enjoy.
Slowing infrastructure investment in China and weakness in Europe may continue to weigh on the fund’s holdings. Read more
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