Morningstar Rating

ETF Research and Analysis

by Alex Bryan
Suitability
Vanguard Materials ETF VAW is one of the cheapest and most comprehensive U.S. materials-sector exchange-traded funds available. It invests in nearly every notable publicly traded materials company based in the United States.  Read more 

Bull Case

This is one of the cheapest and most comprehensive U.S. materials-sector funds available.
Some of the fund's larger holdings in the chemicals industry are shifting their focus up the value chain toward less-cyclical, higher-margin specialty chemicals.
Low natural gas prices may continue to help the fund's North American chemical producers.  Read more 

Bear Case

The fund's holdings operate in highly cyclical industries where it is difficult to establish sustainable competitive advantages, and they must contend with volatile input prices.
Infrastructure investment in China may continue to slow over the long term, which could create a headwind for the fund's holdings.
New capacity could squeeze margins in the chemicals industry.  Read more 

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