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The Vanguard Materials ETF (VAW) was launched on 01/26/2004, and is a passively managed exchange traded fund designed to offer broad exposure to the Materials - Broad segment of the equity market.
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
Sector ETFs are also funds of convenience, offering many ways 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 15, placing it in bottom 6%.
Index Details
The fund is sponsored by Vanguard. It has amassed assets over $2.65 billion, making it one of the largest ETFs attempting to match the performance of the Materials - Broad segment of the equity market. VAW seeks to match the performance of the MSCI US Investable Market Materials 25/50 Index before fees and expenses.
The MSCI US Investable Market Materials 25/50 Index includes stocks of U.S. companies within the materials sector.
Costs
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for this ETF are 0.09%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.76%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that 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 16.41% of total assets, followed by Sherwin-Williams Co/the (SHW) and Air Products And Chemicals Inc (APD).
The top 10 holdings account for about 42.10% of total assets under management.
Performance and Risk
Year-to-date, the Vanguard Materials ETF has gained about 1.26% so far, and is down about -5.43% over the last 12 months (as of 04/02/2025). VAW has traded between $185.71 and $215.21 in this past 52-week period.
The ETF has a beta of 1.08 and standard deviation of 19.19% for the trailing three-year period, making it a medium risk choice in the space. With about 119 holdings, it effectively diversifies company-specific risk.