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Basic Materials ETFs: Investing in the Foundation of Global Growth

Your comprehensive guide to investing in Basic Materials through thematic ETFs

Guide to Investing in Basic Materials ETFs

From industrial metals and chemicals to forestry products and construction materials, the Basic Materials sector is the backbone of global infrastructure and manufacturing. As economies expand and urbanization accelerates, demand for raw materials and processed goods continues to rise. Basic Materials ETFs provide investors with diversified exposure to companies involved in the extraction, refinement, and distribution of these essential resources. These funds bundle market leaders in commodities like copper, steel, and chemicals into a single trade, offering a streamlined way to capitalize on cyclical recoveries, infrastructure spending, and long-term commodity trends.

Key Benefits:

Diversified Commodity Exposure

Access a broad basket of companies involved in metals, chemicals, and construction materials, reducing reliance on any single commodity or company.

Cyclical Growth Potential

Participate in economic recoveries and infrastructure booms that drive demand for raw materials and industrial inputs.

Inflation Hedge

Basic Materials often perform well during inflationary periods, as rising prices for commodities can boost revenues and margins.

Liquidity and Convenience

ETFs trade intraday with tight spreads, providing an efficient way to gain exposure to the Basic Materials sector without stock-picking complexity.

ETFs in Sector: Basic Materials

ETF Name	Ticker	Expense Ratio	AUM	Asset Class	1 Month	YTD	3 Year	ALL Years
SPDR Gold Shares	GLD	0.40 %	$93.5B	Commodity	20.12 %	1.78 %	31.33 %	10.65 %
Vanguard Small Cap Value ETF	VBR	0.07 %	$53.6B	Equity	-38.52 %	18.43 %	17.18 %	9.66 %
iShares Gold Trust	IAU	0.25 %	$41.9B	Commodity	21.82 %	1.87 %	31.52 %	11.08 %
iShares Silver Trust	SLV	0.50 %	$15.4B	Commodity	2.21 %	-5.74 %	42.44 %	7.54 %
VanEck Gold Miners ETF	GDX	0.51 %	$14.8B	Equity	9.92 %	15.97 %	53.74 %	5.81 %
SPDR Gold MiniShares Trust	GLDM	0.10 %	$13.2B	Commodity	25.34 %	1.94 %	31.73 %	16.32 %
The Sprott Physical Silver Trust	PSLV	—	$6.2B	Commodity	2.13 %	-6.72 %	41.30 %	5.09 %
VanEck Junior Gold Miners ETF	GDXJ	0.52 %	$5.4B	Equity	8.81 %	13.60 %	58.86 %	3.53 %
Materials Select Sector SPDR Fund	XLB	0.08 %	$5.2B	Equity	-3.37 %	14.24 %	9.99 %	8.29 %
FlexShares Morningstar Global Upstream Natural Resources Index Fund	GUNR	0.46 %	$4.9B	Equity	6.85 %	26.95 %	15.58 %	6.83 %
abrdn Physical Gold Shares ETF	SGOL	0.17 %	$4.8B	Commodity	19.14 %	1.95 %	31.64 %	8.86 %
Vanguard Materials ETF	VAW	0.09 %	$3.8B	Equity	1.15 %	16.77 %	12.17 %	9.29 %
SPDR S&P Global Natural Resources ETF	GNR	0.40 %	$2.7B	Equity	6.14 %	29.99 %	16.78 %	6.05 %
Global X Copper Miners ETF	COPX	0.65 %	$2.6B	Equity	6.44 %	33.16 %	40.22 %	7.06 %
SPDR S&P Aerospace & Defense ETF	XAR	0.35 %	$2.6B	Equity	-14.43 %	2.33 %	28.57 %	17.76 %
First Trust Managed Municipal ETF	FMB	0.65 %	$2B	Bond	-2.14 %	-1.07 %	2.97 %	2.67 %
abrdn Physical Silver Shares ETF	SIVR	0.30 %	$1.6B	Commodity	2.29 %	-5.57 %	42.70 %	9.30 %
SPDR S&P Metals & Mining ETF	XME	0.35 %	$1.6B	Equity	1.40 %	15.19 %	33.11 %	6.23 %
Global X Silver Miners ETF	SIL	0.65 %	$1.4B	Equity	10.89 %	20.03 %	61.10 %	6.25 %
Invesco DB Commodity Index Tracking Fund	DBC	0.85 %	$1.3B	Commodity	9.76 %	46.91 %	14.38 %	2.77 %
abrdn Physical Precious Metals Basket Shares ETF	GLTR	0.60 %	$1.3B	Commodity	1.01 %	-1.99 %	32.55 %	6.36 %
iShares MSCI Global Gold Miners ETF	RING	0.39 %	$1.3B	Equity	11.34 %	19.36 %	60.53 %	5.05 %
Sprott Uranium Miners ETF	URNM	0.75 %	$1.2B	Equity	4.36 %	3.81 %	16.12 %	28.42 %
abrdn Physical Platinum Shares ETF	PPLT	0.60 %	$1.1B	Commodity	7.79 %	-8.01 %	27.56 %	45.51 %
Amplify Junior Silver Miners ETF	SILJ	0.69 %	$1.1B	Equity	6.93 %	15.43 %	57.33 %	4.61 %
iShares MSCI ACWI Low Carbon Target ETF	CRBN	0.20 %	$946.1M	Equity	-60.66 %	12.34 %	20.80 %	10.89 %
Global X Lithium & Battery Tech ETF	LIT	0.75 %	$914.3M	Equity	-1.30 %	14.22 %	9.84 %	6.58 %
iShares U.S. ETF Trust iShares GSCI Commodity Dynamic Roll Strategy ETF	COMT	0.48 %	$683.2M	Multi-Asset	10.24 %	48.77 %	14.95 %	4.39 %
Direxion Daily Gold Miners Index Bull 2x Shares	NUGT	—	$543.4M	Equity	17.90 %	5.05 %	88.29 %	-31.17 %
Fidelity MSCI Materials Index ETF	FMAT	0.08 %	$517.6M	Equity	-2.86 %	12.12 %	10.63 %	8.78 %
iShares U.S. Basic Materials ETF	IYM	0.39 %	$505.5M	Equity	-34.61 %	24.10 %	14.95 %	8.56 %
VanEck Vietnam ETF	VNM	0.70 %	$416.2M	Equity	1.19 %	-6.45 %	6.85 %	-64.29 %
abrdn Physical Palladium Shares ETF	PALL	0.60 %	$368.9M	Commodity	-2.15 %	-15.50 %	3.71 %	6.48 %
Sprott Gold Miners ETF	SGDM	0.50 %	$334.2M	Equity	10.59 %	18.63 %	52.28 %	11.42 %
iShares MSCI Global Silver Miners ETF	SLVP	0.39 %	$261.5M	Equity	10.03 %	19.53 %	67.07 %	4.77 %
VanEck Rare Earth and Strategic Metals ETF	REMX	0.56 %	$255.2M	Equity	-2.69 %	3.27 %	4.17 %	-4.14 %
SPDR SSgA Global Allocation ETF	GAL	0.35 %	$243.4M	Multi-Asset	3.72 %	9.87 %	14.15 %	7.38 %
iShares Global Timber & Forestry ETF	WOOD	0.41 %	$235.2M	Equity	-3.03 %	-53.88 %	1.25 %	4.00 %
Sprott Junior Uranium Miners ETF	URNJ	0.80 %	$206.3M	Equity	10.70 %	4.59 %	14.24 %	10.62 %
United States Copper Index Fund	CPER	1.04 %	$201.6M	Commodity	2.17 %	17.42 %	21.53 %	3.35 %
Invesco DB Precious Metals Fund	DBP	0.75 %	$201.4M	Commodity	93.64 %	-39.88 %	32.37 %	8.58 %
KraneShares Global Carbon Strategy ETF	KRBN	0.85 %	$172.1M	Commodity	2.28 %	-1.16 %	2.61 %	16.42 %
VanEck Natural Resources ETF	HAP	0.43 %	$151.8M	Equity	6.54 %	30.51 %	19.58 %	6.56 %
Sprott Junior Gold Miners ETF	SGDJ	0.50 %	$143.5M	Equity	7.09 %	18.88 %	64.24 %	16.28 %
Invesco MSCI Sustainable Future ETF	ERTH	0.67 %	$141.3M	Equity	-3.72 %	-3.17 %	32.15 %	4.55 %
Invesco DB Base Metals Fund	DBB	0.75 %	$124.5M	Commodity	2.42 %	14.60 %	18.71 %	1.84 %
US Global GO GOLD and Precious Metal Miners ETF	GOAU	0.60 %	$108.7M	Equity	19.46 %	14.44 %	49.75 %	18.63 %
CoinShares Valkyrie Bitcoin Miners ETF	WGMI	0.75 %	$105.9M	Equity	5.07 %	24.98 %	64.82 %	13.38 %
SPDR DoubleLine Emerging Markets Fixed Income ETF	EMTL	0.65 %	$98.7M	Bond	0.00 %	67.63 %	6.73 %	7.64 %
Principal Investment Grade Corporate Active ETF	IG	0.19 %	$96.9M	Bond	-20.57 %	-75.66 %	5.10 %	2.47 %
VanEck Environmental Services ETF	EVX	0.55 %	$80M	Equity	-2.89 %	4.76 %	10.12 %	9.12 %
VanEck Steel ETF	SLX	0.56 %	$75.2M	Equity	93.58 %	30.92 %	22.29 %	8.03 %
GraniteShares Platinum Trust	PLTM	0.50 %	$50.3M	Commodity	7.96 %	-7.91 %	27.73 %	7.27 %
ProShares Ultra Materials	UYM	—	$33.9M	Equity	-7.51 %	21.99 %	10.07 %	4.18 %
VanEck Green Metals ETF	GMET	0.66 %	$16.7M	Equity	0.00 %	20.92 %	19.06 %	7.51 %
Sprott Lithium Miners ETF	LITP	0.65 %	$13.2M	Equity	0.00 %	-5.56 %	-4.58 %	-11.00 %
First Trust Alerian US NextGen Infrastructure ETF	RBLD	0.65 %	$13.1M	Equity	-2.87 %	15.36 %	18.85 %	8.22 %
Sprott Nickel Miners ETF	NIKL	0.75 %	$10.1M	Equity	6.30 %	-7.03 %	-2.35 %	5.10 %
Invesco MSCI Green Building ETF	GBLD	0.39 %	$6.5M	Equity	0.00 %	4.49 %	9.03 %	-1.04 %
Amplify Weight Loss Drug & Treatment ETF	THNR	0.59 %	$3.9M	Equity	-26.49 %	3.62 %	2.12 %	40.83 %
MicroSectors Gold Miners -3X Inverse Leveraged ETNs	GDXD	—	—	Equity	-48.75 %	-80.09 %	-89.23 %	4.74 %
MicroSectors Gold Miners 3X Leveraged ETN	GDXU	—	—	Equity	51.12 %	-33.55 %	73.07 %	-6.76 %
Direxion Daily PLTR Bear 1X Shares	PLTD	—	—	Equity	-12.94 %	-18.96 %	-39.40 %	4.53 %

Why Invest?

Basic Materials are critical to economic growth, making them a compelling investment during periods of expansion and infrastructure development. Investing through Basic Materials ETFs allows you to gain exposure to cyclical upturns while mitigating the risks associated with individual commodity price volatility. These funds span industries such as mining, chemicals, and paper products, offering balanced exposure to global demand drivers like renewable energy projects, electric vehicle production, and housing construction.

Expert Insights:

When evaluating Basic Materials ETFs, consider the fund’s subsector allocation—does it focus on metals, chemicals, or a broad mix? Pay attention to geographic diversification, as regional demand and regulatory environments can vary significantly. Monitor commodity price trends, supply-chain dynamics, and macroeconomic indicators like industrial production and construction activity. Given the sector’s cyclical nature, position sizing should reflect economic conditions and inflation expectations.

Investment Considerations

While Basic Materials offer growth potential, investors should weigh these key factors:

Commodity Price Volatility

Fluctuations in raw material prices can significantly impact profitability for companies in the sector.

Economic Sensitivity

Basic Materials are highly cyclical, with demand closely tied to global GDP growth and industrial activity.

Regulatory and Environmental Risks

Mining and chemical production face stringent environmental regulations, which can affect operations and costs.

Portfolio Allocation

Given the sector’s cyclicality, Basic Materials ETFs are often best used as a tactical allocation within a diversified portfolio.

Sector Outlook

Sector Trends and Growth Drivers

The Basic Materials sector is influenced by global economic trends, infrastructure spending, and commodity cycles.

Infrastructure Development

Government spending on roads, bridges, and renewable energy projects is driving demand for steel, cement, and other construction materials.

Electric Vehicle Boom

The shift toward electric vehicles is increasing demand for lithium, copper, and other metals used in batteries and wiring.

Sustainable Materials

Growing emphasis on sustainability is boosting investment in recycled materials, bio-based chemicals, and eco-friendly packaging.