Materials Sector: Overview and Funds

The materials sector is composed of companies that make basic products, such as cardboard or glue, that are used by a variety of other industries or companies. Companies that are classified in the materials sector manufacture products such as fertilizers, plastic, paint, concrete, cork, aluminum, gold, timber and paper. Five major industries make up the materials sector: chemicals, construction materials, containers and packaging, metals and mining and paper and forest products.

Chemicals

The chemicals industry includes basic or “commodity” chemicals, diversified chemicals, agricultural chemicals, specialty chemicals and industrial gases. The difference between the four chemical groups is how the chemicals are used. Commodity chemicals are typically used for industrial purposes, agricultural chemicals are used for crop-growing and other farming activities, specialty chemicals are used to make other products and diversified chemicals is a classification for any chemical company that cannot be classified within the first three groups. Industrial gases refer to the production of gases, such as oxygen or helium, for use by other industries. 

IndustrySub-IndustryDescription
Chemicals Commodity Chemicals Companies that produce basic chemicals, including plastics, synthetic fibers (such as rayon, nylon, or polyester), films, paints and pigments, explosives and petrochemicals (chemicals that come from petroleum). This excludes companies that produce fertilizers and agricultural chemicals, gases or specialty chemicals.
Diversified Chemicals Companies that produce a wide range of chemical products and are not classified in the other chemical sub-industries.
Fertilizers & Agricultural Chemicals Companies that produce fertilizers, pesticides, potash (a chemical used in fertilizers) or any other agricultural chemicals.
Industrial Gases Companies that produce industrial gases, such as nitrogen, hydrogen and helium, for use by other companies and industries.
Specialty Chemicals Companies that produce specialized chemicals, such as additives, polymers, adhesives / glues, sealants, special paints and pigments and coatings, used to manufacture a wide variety of products.

Examples of chemical companies include Dow Chemical, International Flavors and Fragrances, Sherwin-Williams, Du Pont, Ecolab and Airgas.

Construction Materials

Companies within the construction materials industry manufacture basic products that are used to build other structures, such as buildings, bridges or roads. This includes products such as cement or plaster. This industry excludes the companies that actually construct commercial buildings, residential buildings or other structures. Companies that build residential buildings are in the consumer discretionary sector, and companies that build non-residential buildings are in the industrials sector

IndustrySub-IndustryDescription
Construction Materials Construction Materials Companies that produce basic construction materials, such as sand, clay, gypsum (used in plaster and chalk), lime, cement, concrete and bricks. This excludes companies that make home improvement products, such as power tools.

Examples of construction material companies include Vulcan Materials, Martin Marietta Materials, US Concrete, Headwaters and United States Lime and Minerals.

Containers and Packaging

Common products created by companies in this industry include metal, glass or paper containers and packaging. This covers items such as bottles, paint cans, cardboard boxes, caps and corks. 

IndustrySub-IndustryDescription
Containers & Packaging Metal & Glass Containers Companies that make metal, glass or plastic containers. This also includes corks and caps.
Paper Packaging Companies that make paper/cardboard containers and packaging.

Container and packaging companies include Sealed Air Corp. (maker of Bubble Wrap), Owens-Illinois, Ball Corp. (maker of Ball mason jars), WestRock (formerly MeadWestvaco) and Packaging Corporation of America.

Metals and Mining

The metals and mining industry includes companies that mine, process, or produce a variety of metals and minerals, such as aluminum, gold, steel, or gem stones. Interestingly, this industry also includes South African finance companies that invest in gold mines. This is because over 50% of all gold reserves are located in South Africa.

IndustrySub-IndustryDescription
Metals & Mining Aluminum Companies that produce aluminum. This includes companies that mine or process aluminum ore (also called "bauxite") and companies that recycle aluminum to make other products. This excludes companies that produce aluminum products for construction and/or home building.
Diversified Metals & Mining Companies that mine or process a wide range of metals and minerals and are not classified in the other sub-industries. This includes companies that mine non-ferrous metals, salt and phosphate. Non-ferrous means a metal does not contain a high amount of iron. Non-ferrous metals include copper, lead, nickel, titanium and zinc. Phosphates are used in a wide variety of products, such as fertilizers or cleaning products.
Gold Companies that produce gold and gold products. This includes companies that mine or process gold and South African finance companies that invest in gold mines.
Precious Metals & Minerals Companies that mine precious metals and minerals, including platinum and gem stones. It excludes gold and silver.
Silver Companies that primarily mine silver.
Steel Companies that produce iron, steel and related products. This includes companies that mine for coking coal, which is material essential for producing steel.

Examples of metals and mining companies include Southern Copper, Compass Minerals, Freeport-McMoRan, Alcoa, United States Steel and AK Steel Holding Corp.

Paper and Forest Products

Companies in this industry produce wood and paper products, such as lumber, timber, and office printing paper. Lumber and timber are frequently used interchangeably, but there is a distinct difference between the two terms. Timber can refer to trees that have yet to be cut down or to pieces of wood that retain bark. On the other hand, lumber refers specifically to wood that has been processed and debarked.

IndustrySub-IndustryDescription
Paper & Forest Products Forest Products Companies that produce timber and other wood products, including lumber.
Paper Products Companies that produce any type of paper. This excludes companies that produce paper packaging (such as cardboard); these companies classifed in the Containers and Packaging industry above.

Examples of companies that fall into this group include International Paper, Deltic Timber Corp., Louisiana-Pacific Corp. and Mercer International.

Materials Sector ETFs and Mutual Funds

We found 240 mutual funds, index funds, and ETFs that cover the materials sector, which we've listed below. Some of these funds track natural resources, which will also include oil and gas companies in the energy sector, or construction and homebuilding, which will also include construction companies from the consumer discretionary sector. The expense ratios on these funds vary from 0.10% to 3.99%.

NameSymbolExpense Ratio
Vanguard Materials ETF VAW 0.10%
Vanguard Materials Index Adm VMIAX 0.10%
Fidelity® MSCI Materials ETF FMAT 0.12%
Materials Select Sector SPDR ETF XLB 0.14%
PowerShares S&P SmallCap Materials ETF PSCM 0.29%
Vanguard Precious Metals and Mining Inv VGPMX 0.29%
SPDR S&P Homebuilders ETF XHB 0.35%
SPDR S&P Metals & Mining ETF XME 0.35%
iShares MSCI Global Gold Miners RING 0.39%
iShares MSCI Glbl Metals & Mining Prdcrs PICK 0.39%
iShares MSCI Glbl Agriculture Producers VEGI 0.39%
iShares MSCI Global Silver Miners SLVP 0.39%
SPDR S&P Global Natural Resources ETF GNR 0.40%
Guggenheim S&P 500® Eq Wt Materials ETF RTM 0.40%
UBS ETRACS ISE Exclusively Hmbldrs ETN HOMX 0.40%
SPDR® S&P International Matls Sect ETF IRV 0.40%
iShares U.S. Home Construction ETF ITB 0.43%
iShares U.S. Basic Materials ETF IYM 0.43%
iShares North American Natural Resources ETF IGE 0.47%
iShares Global Timber & Forestry WOOD 0.47%
iShares Global Materials ETF MXI 0.47%
American Century Global Gold Instl AGGNX 0.47%
FlexShares Morningstar Global Upstream Natural Resources ETF GUNR 0.48%
Market Vectors® Natural Resources ETF HAP 0.50%
Market Vectors TR Gold Miners GDX 0.53%
Market Vectors Junior Gold Miners ETF GDXJ 0.55%
Market Vectors® Steel ETF SLX 0.55%
Market Vectors Agribusiness ETF MOO 0.57%
Sprott Gold Miners ETF SGDM 0.57%
ALPS Sprott Junior Gold Miners ETF SGDJ 0.57%
Market Vectors® Rare EarthStrat Mtls ETF REMX 0.58%
WisdomTree Global Natural Resources ETF GNAT 0.58%
T. Rowe Price New Era I TRNEX 0.58%
PowerShares DWA Basic Materials Mom ETF PYZ 0.60%
PowerShares Dynamic Building & Const ETF PKB 0.63%
First Trust Materials AlphaDEX® ETF FXZ 0.64%
Global X Silver Miners ETF SIL 0.65%
Global X Gold Explorers ETF GLDX 0.65%
Global X Copper Miners ETF COPX 0.65%
Global Commodity Equity ETF CRBQ 0.65%
Global X China Materials ETF CHIM 0.65%
T. Rowe Price New Era PRNEX 0.67%
American Century Global Gold Inv BGEIX 0.67%
Global X Fertilizers/Potash ETF SOIL 0.69%
PureFunds™ ISE Junior Silver ETF SILJ 0.69%
T. Rowe Price Real Assets I PRIKX 0.69%
Guggenheim Timber ETF CUT 0.70%
Global X Uranium ETF URA 0.70%
First Trust ISE Glb Engnrg And Const ETF FLM 0.70%
First Trust NASDAQ® Cln Edge®StGidIfsETF GRID 0.70%
GMO Resources IV GOVIX 0.71%
Oppenheimer Gold & Special Minerals I OGMIX 0.72%
US Global Investors Global Res Instl PIPFX 0.74%
TIAA-CREF Global Natural Resources Instl TNRIX 0.74%
IQ Global Resources ETF GRES 0.75%
PowerShares Global Gold & Prec Mtls ETF PSAU 0.75%
PowerShares Global Agriculture ETF PAGG 0.76%
IQ Global Agribusiness Small Cap ETF CROP 0.76%
GMO Resources III GOFIX 0.76%
Prudential Jennison Natural Resources Q PJNQX 0.76%
Global X Lithium ETF LIT 0.77%
Fidelity Advisor® Materials I FMFEX 0.78%
Franklin Natural Resources Adv FNRAX 0.78%
Fidelity® Select Chemicals FSCHX 0.79%
Wells Fargo Precious Metals Inst EKWYX 0.79%
Fidelity® Select Materials FSDPX 0.80%
T. Rowe Price Real Assets PRAFX 0.83%
Columbia Global Energy & Natural Res I CERIX 0.84%
Franklin Gold and Precious Metals Adv FGADX 0.84%
UBS ETRACS M Rst 2xLvg ISE Excly Hbs ETN HOML 0.85%
UBS ETRACS Wells Fargo MLP Ex-Energy ETN FMLP 0.85%
TIAA-CREF Global Natural Resources Adv TNRHX 0.85%
Fidelity Advisor® Gold I FGDIX 0.86%
Columbia Global Energy & Natural Res R5 CNRRX 0.89%
TIAA-CREF Global Natural Resources Prem TNRPX 0.90%
Fidelity® Select Gold FSAGX 0.90%
Prudential Jennison Natural Resources Z PNRZX 0.92%
American Century Global Gold A ACGGX 0.92%
Oppenheimer Gold & Special Minerals Y OGMYX 0.92%
JHancock Natural Resources NAV JHNRX 0.93%
Putnam Global Natural Resources Y PGRYX 0.93%
ProShares Ultra Basic Materials UYM 0.95%
ProShares Short Basic Materials SBM 0.95%
ProShares UltraShort Basic Materials SMN 0.95%
ProShares UltraShort Gold Miners GDXS 0.95%
ProShares UltraShort Homebuilders & Supl HBZ 0.95%
ProShares Ultra Homebuilders & Supplies HBU 0.95%
ProShares UltraShort Junior Miners GDJS 0.95%
Ivy Global Natural Resources R6 INRSX 0.95%
Wells Fargo Precious Metals Admin EKWDX 0.96%
Direxion Daily Gold Miners Bear 3X ETF DUST 0.97%
Direxion Daily Jr Gld Mnrs Bear 3X ETF JDST 0.97%
Direxion Daily Hmbldrs&Supls Bear 3X ETF CLAW 0.97%
JHancock Natural Resources 1 JINRX 0.98%
USAA Precious Metals and Minerals Instl UIPMX 0.99%
Van Eck Global Hard Assets I GHAIX 1.00%
TIAA-CREF Global Natural Resources Retir TNRRX 1.00%
Van Eck Intl Investors Gold I INIIX 1.00%
Deutsche Gold & Precious Metals S SCGDX 1.00%
Deutsche Gold & Precious Metals Instl SGDIX 1.00%
Direxion Daily Junior Gold Miners Bull 3X ETF JNUG 1.01%
Aberdeen Global Natural Resources I GGNIX 1.02%
Aberdeen Global Natural Resources I/S GGNSX 1.02%
Direxion Daily Gold Miners Bull 3X ETF NUGT 1.03%
First Eagle Gold I FEGIX 1.03%
Fidelity Advisor® Materials A FMFAX 1.06%
AllianzGI Global Natural Resources Instl RGLIX 1.06%
Columbia Global Energy & Natural Res R4 CENRX 1.07%
Rational Real Strategies Instl HRSTX 1.07%
Columbia Global Energy & Natural Res Z UMESX 1.07%
Fidelity Advisor® Global Commodity Stk I FFGIX 1.08%
Franklin Natural Resources A FRNRX 1.08%
Dreyfus Natural Resources I DLDRX 1.09%
Franklin Gold and Precious Metals A FKRCX 1.09%
Dreyfus Natural Resources Y DLDYX 1.10%
Wells Fargo Precious Metals A EKWAX 1.10%
Van Eck Intl Investors Gold Y INIYX 1.10%
Direxion Daily Hmbldrs&Supls Bull 3X ETF NAIL 1.11%
Fidelity® Global Commodity Stock FFGCX 1.11%
Ivy Global Natural Resources I IGNIX 1.11%
ProShares Ultra Gold Miners GDXX 1.12%
Frost Natural Resources Institutional FNRFX 1.12%
Columbia Global Energy & Natural Res B CEGBX 1.13%
Van Eck Global Hard Assets Y GHAYX 1.13%
TIAA-CREF Global Natural Resources Ret TNRLX 1.13%
ProShares Ultra Junior Miners GDJJ 1.14%
RS Global Natural Resources Y RSNYX 1.14%
AllianzGI Global Natural Resources P APGPX 1.16%
AllianzGI Global Water P AWTPX 1.16%
Oppenheimer Gold & Special Minerals A OPGSX 1.16%
AllianzGI Global Water Institutional AWTIX 1.17%
American Century Global Gold R AGGWX 1.17%
Putnam Global Natural Resources A EBERX 1.18%
Fidelity Advisor® Gold A FGDAX 1.19%
Invesco Gold & Precious Metals Y IGDYX 1.20%
US Global Investors World Prec Mnral Ins UNWIX 1.20%
Prudential Jennison Natural Resources A PGNAX 1.22%
Rydex Precious Metals Inv RYPMX 1.25%
Deutsche Gold & Precious Metals A SGDAX 1.25%
USAA Precious Metals and Minerals USAGX 1.25%
Ivy Global Natural Resources E IGNEX 1.27%
Calvert Global Water I CFWIX 1.29%
Columbia Global Energy & Natural Res A EENAX 1.32%
Rational Real Strategies A HRSAX 1.32%
First Eagle Gold A SGGDX 1.33%
Dreyfus Natural Resources A DNLAX 1.34%
Fidelity Advisor® Global Commodity Stk A FFGAX 1.34%
Aberdeen Global Natural Resources A GGNAX 1.34%
Rydex Basic Materials Inv RYBIX 1.34%
Ivy Global Natural Resources Y IGNYX 1.35%
RidgeWorth Cap Innvts Glbl Rs&Infrs I INNNX 1.35%
Van Eck Global Hard Assets A GHAAX 1.36%
GuideStone Funds Global Natrl Res Eq Inv GNRZX 1.36%
Gabelli Gold I GLDIX 1.36%
Fidelity Advisor® Materials T FMFTX 1.37%
Frost Natural Resources Investor FNATX 1.37%
JHancock Natural Resources I JNRIX 1.38%
USAA Precious Metals and Minerals Adv UPMMX 1.39%
AllianzGI Global Natural Resources A ARMAX 1.41%
ICON Natural Resources S ICBMX 1.42%
Prudential Jennison Natural Resources R JNRRX 1.42%
Oppenheimer Gold & Special Minerals R OGMNX 1.42%
MainStay Cushing® Renaissance Advtg I CRZZX 1.43%
Putnam Global Natural Resources R PGNRX 1.43%
Van Eck Intl Investors Gold A INIVX 1.43%
Tocqueville Gold TGLDX 1.43%
AllianzGI Global Water A AWTAX 1.44%
RS Global Natural Resources A RSNRX 1.45%
Invesco Gold & Precious Metals Invstor FGLDX 1.45%
Invesco Gold & Precious Metals A IGDAX 1.45%
Fidelity Advisor® Gold T FGDTX 1.46%
JHancock Natural Resources A JNRAX 1.47%
Calvert Global Water Y CFWYX 1.49%
EuroPac Gold A EPGFX 1.50%
Rydex Precious Metals A RYMNX 1.50%
US Global Investors Global Res PSPFX 1.52%
Columbia Global Energy & Natural Res R CETRX 1.57%
Ivy Global Natural Resources A IGNAX 1.57%
Aberdeen Global Natural Resources R GGNRX 1.59%
RidgeWorth Cap Innvts Glbl Rs&Infrs A INNAX 1.60%
Rydex Basic Materials A RYBMX 1.60%
Fidelity Advisor® Global Commodity Stk T FFGTX 1.62%
Gabelli Gold A GLDAX 1.62%
Gabelli Gold AAA GOLDX 1.62%
American Century Global Gold C AGYCX 1.67%
Putnam Global Natural Resources M PGLMX 1.68%
MainStay Cushing® Renaissance Advtg A CRZAX 1.69%
Ivy Global Natural Resources R IGNRX 1.69%
ICON Natural Resources A ICBAX 1.75%
Rydex Precious Metals H RYMPX 1.75%
Franklin Natural Resources C FNCRX 1.78%
RS Global Natural Resources K RSNKX 1.78%
US Global Investors World Prec Mnral UNWPX 1.81%
Calvert Global Water A CFWAX 1.82%
Fidelity Advisor® Materials C FMFCX 1.82%
MainStay Cushing® Renaissance Advtg Inv CRZNX 1.83%
Franklin Gold and Precious Metals C FRGOX 1.84%
Rydex Basic Materials H RYBAX 1.85%
Wells Fargo Precious Metals B EKWBX 1.85%
Wells Fargo Precious Metals C EKWCX 1.85%
Fidelity Advisor® Materials B FMFBX 1.89%
Prudential Jennison Natural Resources C PNRCX 1.92%
Prudential Jennison Natural Resources B PRGNX 1.92%
Fidelity Advisor® Gold C FGDCX 1.92%
Oppenheimer Gold & Special Minerals C OGMCX 1.92%
Putnam Global Natural Resources C PGLCX 1.93%
Putnam Global Natural Resources B PNRBX 1.93%
Fidelity Advisor® Gold B FGDBX 1.93%
Oppenheimer Gold & Special Minerals B OGMBX 1.93%
Deutsche Gold & Precious Metals C SGDCX 2.00%
OCM Gold Advisors OCMAX 2.01%
Aberdeen Global Natural Resources C GGNCX 2.02%
US Global Investors Gld & Prec Mtls USERX 2.05%
Columbia Global Energy & Natural Res K CEGFX 2.07%
Columbia Global Energy & Natural Res C EENCX 2.07%
Dreyfus Natural Resources C DLDCX 2.08%
Fidelity Advisor® Global Commodity Stk C FCGCX 2.11%
Fidelity Advisor® Global Commodity Stk B FFGBX 2.12%
First Eagle Gold C FEGOX 2.14%
AllianzGI Global Natural Resources C ARMCX 2.16%
Van Eck Global Hard Assets C GHACX 2.16%
Ivy Global Natural Resources C IGNCX 2.20%
Invesco Gold & Precious Metals B IGDBX 2.20%
Invesco Gold & Precious Metals C IGDCX 2.20%
Van Eck Intl Investors Gold C IIGCX 2.20%
AllianzGI Global Water C AWTCX 2.23%
RS Global Natural Resources C RGNCX 2.25%
Rydex Precious Metals C RYZCX 2.25%
RidgeWorth Cap Innvts Glbl Rs&Infrs C INNCX 2.35%
Rydex Basic Materials C RYBCX 2.35%
Gabelli Gold C GLDCX 2.36%
Ivy Global Natural Resources B IGNBX 2.47%
ICON Natural Resources C ICBCX 2.50%
Calvert Global Water C CFWCX 2.53%
MainStay Cushing® Renaissance Advtg C CRZCX 2.56%
OCM Gold Investor OCMGX 2.59%
Saratoga Energy & Basic Materials I SEPIX 2.90%
Saratoga Energy & Basic Materials A SBMBX 3.30%
Saratoga Energy & Basic Materials C SEPCX 3.91%
Midas MIDSX 3.99%

If you are considering purchasing a fund, you should always do research on the fund first. Make sure to research the investment strategy, underlying components, loads and charges, and size of the fund. You should also take into consideration your current investment portfolio and strategy.

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