Should You Invest in the State Street Materials Select Sector SPDR ETF (XLB)?

Launched on December 16, 1998, the State Street Materials Select Sector SPDR ETF (XLB) is a passively managed exchange traded fund designed to provide a broad exposure to the Materials - Broad segment of the equity market.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.Investor-friendly, sector ETFs provide many options 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 2, placing it in top 13%.Index DetailsThe fund is sponsored by State Street Investment Management. It has amassed assets over $6.96 billion, making it one of the largest ETFs attempting to match the performance of the Materials - Broad segment of the equity market. XLB seeks to match the performance of the Materials Select Sector Index before fees and expenses.The Materials Select Sector Index seeks to provide an effective representation of the materials sector of the S&P 500 Index.CostsWhen 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 0.08%, making it the least expensive product in the space.It has a 12-month trailing dividend yield of 1.63%.Sector Exposure and Top HoldingsETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.This ETF has heaviest allocation in the Materials sector -- about 100% of the portfolio.Looking at individual holdings, Linde Plc (LIN) accounts for about 13.61% of total assets, followed by Newmont Corp (NEM) and Crh Plc (CRH).The top 10 holdings account for about 59.5% of total assets under management.Performance and RiskThe ETF return is roughly 17.55% so far this year and it's up approximately 20.6% in the last one year (as of 02/17/2026). In that past 52-week period, it has traded between $37.135 and $53.62.The ETF has a beta of 1.01 and standard deviation of 16.85% for the trailing three-year period, making it a medium risk choice in the space. With about 29 holdings, it has more concentrated exposure than peers.AlternativesState Street Materials Select Sector SPDR ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, XLB is an outstanding option for investors seeking exposure to the Materials ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.State Street SPDR S&P Global Natural Resources ETF (GNR) tracks S&P Global Natural Resources Index and the FlexShares Morningstar Global Upstream Natural Resources ETF (GUNR) tracks Morningstar Global Upstream Natural Resources Index. State Street SPDR S&P Global Natural Resources ETF has $4.73 billion in assets, FlexShares Morningstar Global Upstream Natural Resources ETF has $7.06 billion. GNR has an expense ratio of 0.4%, and GUNR charges 0.46%.Bottom LineTo 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.Boost Your Portfolio with Our Top ETF InsightsZacks' exclusive Fund Newsletter delivers actionable information, top news and analysis, as well as top-performing ETFs, straight to your inbox every week.Don’t miss out on this valuable resource. It’s free!Get it now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report State Street Materials Select Sector SPDR ETF (XLB): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks