Passive ETF investing in US large-cap materials companies
Description
This passive ETF seeks to track the Materials Select Sector Index, which comprises large-capitalization US companies from the S&P 500 identified as Materials companies under the Global Industry Classification Standard. It typically invests at least 95% of assets in substantially all Index securities in approximately their Index proportions, using a replication strategy and modified market-cap weighting.
Investment strategy
Replicated exposure to S&P 500 materials companies using modified market-cap weighting
Investment strategy details
The Fund invests substantially all, and normally at least 95%, of its assets in the securities comprising the Materials Select Sector Index. The Index includes S&P 500 companies classified by the Global Industry Classification Standard as Materials companies, including chemicals, metals and mining, paper and forest products, containers and packaging, and construction materials. The Fund uses replication, typically holding substantially all securities in approximately their Index proportions. S&P Dow Jones Indices applies a modified market-capitalization methodology that may adjust single-stock weights to meet Internal Revenue Code requirements.
Holdings keywords
- S&P 500 constituents
- GICS Materials sector
- Modified market-cap weighting
News keywords
- Materials
- passive
- US
Strengths
Replication and a broad materials-industry scope provide targeted exposure across chemicals, metals, mining, packaging, paper, and construction materials
Risks
Materials-sector concentration and a 26-stock Index amplify losses from commodity prices, economic cycles, regulation, and individual issuer declines
Portfolio construction
Index criteria
S&P 500 materials companies across chemicals, metals, mining, paper, packaging, and construction materials
Selection criteria
Replicates substantially all Index constituents, which are S&P 500 companies identified as Materials by GICS
Weighting criteria
Modified market-cap weighting, with adjustments for single-stock concentration; weights set by S&P DJI