XLB vs. VAW vs. IYM: Materials ETF Holdings and Basket Overlap

A sector label gives only a starting point. XLB selects materials companies from the S&P 500; VAW follows an MSCI benchmark spanning U.S. large-, mid-, and small-cap stocks; IYM follows a Russell 1000 subset classified under ICB and capped for RIC diversification rules. Company size, industry taxonomy, rebalance caps, and fund implementation all change what sits inside the ETF. That is why comparing ticker names alone can miss the largest difference: the rules that decide what is eligible.

The holdings dates matter as much as the labels. State Street’s XLB workbook says “As of 24-Sep-2026”; BlackRock’s IYM CSV says “Sep 24, 2026”; Vanguard’s full VAW API response is dated August 31, 2026. Do not read the columns as if they describe one simultaneous market close. The XLB profile, Vanguard VAW profile, and iShares IYM profile identify each fund’s current benchmark; the dated issuer files supply the weights used below.

XLB’s S&P 500 parent universe puts a large-company boundary around its sector sleeve. S&P describes the Select Sector family as S&P 500 subsets selected by GICS and capped to diversify company weights. VAW’s MSCI US IMI benchmark includes large, mid, and small caps, while its 25/50 rules reflect RIC concentration limits. IYM’s “22.5/45” label refers to a different threshold design: a quarterly index rebalance limits a single issuer to 22.5% and the combined weight of issuers above 4.5% to 45%. The rules apply to index construction and review; daily market moves can change fund weights between reviews. Read the S&P index page, S&P U.S. methodology, MSCI factsheet, MSCI 25/50 methodology, and Russell capped-index code sheet.

XLB and VAW use GICS Materials classifications. GICS covers chemicals, construction materials, forest products, glass, paper and packaging, and metals, minerals, mining, and steel. Companies that build machinery, supply construction services, or operate energy infrastructure may be linked to materials demand without being GICS Materials constituents. An operating relationship is not the same thing as sector membership.

IYM’s benchmark uses FTSE Russell’s ICB, a separate company-classification framework. Do not map an ICB label one-for-one onto GICS. BlackRock’s own September 24 holdings CSV also has a “Sector” field: six equity rows—FAST, CRS, RBC, MLI, TKR, and HXL—are labelled “Industrials” there and add to 10.82%. That is the issuer file’s display taxonomy, not proof that Russell classified each security outside the index’s ICB Basic Materials universe. The distinction is useful: a fund’s benchmark taxonomy and its sponsor’s holdings-display categories may answer different questions. See the GICS overview and FTSE Russell ICB rules.

The five leading names overlap heavily, yet their weights tell a different story. Linde (LIN), Newmont (NEM), and Freeport-McMoRan (FCX) rank in the top three of all three source files. On the same September 24 date, IYM assigns LIN 19.01% and its five largest positions total 50.11%; XLB assigns LIN 11.84% and its top five total 33.82%. The broader or differently classified basket is not automatically less concentrated: IYM reports 39 equity positions and 67.67% in its top ten, while XLB has 25 and 56.08% in its top ten. Top-ten sums are descriptive snapshots, not forecasts of volatility.

XLB’s 25 direct equity rows sum to 99.762947% in State Street’s workbook. IYM’s 39 equity rows sum to 99.78% in BlackRock’s CSV; its remaining rows include a money-market fund, cash, collateral, and a futures line with zero market value. Vanguard’s August file has 110 equity rows summing to 99.29%, plus short-term reserves and a separate Air Products total-return swap (TRS). These source categories and rounding explain why an equity-only sum need not equal exactly 100% of net assets. For issuer-defined counts and fees, see the State Street page, Vanguard page, and iShares page.

XLB’s September 24 file contains 25 equities, matching State Street’s profile count for that date. Its 10 largest positions sum to 56.08% from the full-precision workbook; the displayed top-five weights sum to 33.82%. Linde alone is 11.84%, followed by Newmont at 7.01% and Freeport-McMoRan at 5.68%. A 25-stock basket can still spread exposure across chemicals, miners, steelmakers, packaging, and construction materials, but the market value of a few leaders remains important.

The fund follows the Materials Select Sector Index, a sector slice of the S&P 500. It therefore leaves out companies that do not meet the parent index’s membership rules, even if their business is plainly connected to materials. State Street reports a gross expense ratio of 0.08%. Its daily workbook is the weight source here; the fund profile states the benchmark and current prospectus fee.

Vanguard’s August 31, 2026 official holdings API response lists 110 equity holdings. The top ten sum to 57.38% using the API’s two-decimal weights. Linde is 14.57%, Newmont 8.58%, Freeport-McMoRan 7.00%, Sherwin-Williams 4.97%, and Ecolab 4.61%. MSCI’s factsheet for the same date also reports 110 index constituents. Matching counts do not mean that fund weights and index weights are interchangeable: the API reports VAW’s portfolio while the factsheet describes the index.

VAW’s benchmark covers GICS Materials companies across the large-, mid-, and small-cap segments of the U.S. market. Vanguard says it uses full replication when possible and sampling when constraints prevent it; the expense ratio is 0.09% as of December 19, 2025. Its broader eligibility range can add companies that cannot enter XLB’s S&P 500-only universe, while large companies still dominate the fund’s top positions. The VAW file is dated August 31, 24 days before XLB and IYM’s September 24 snapshots, so every VAW overlap figure below is mixed-date. Use the VAW profile, complete dated holdings response, and MSCI August factsheet for their distinct scopes.

One persistent-identifier issue deserves disclosure. Vanguard’s August response lists Amcor (AMCR) with CUSIP G0250X107, while State Street’s September file lists AMCR with G0250X149. Amcor’s official January 2026 notice says its one-for-five reverse split changed the CUSIP while retaining the ticker. We matched AMCR by ticker and company name after checking that corporate action; the stale Vanguard identifier is why ticker-and-name reconciliation is visible rather than silently treating the CUSIPs as equal. See Amcor’s reverse-split notice.

BlackRock’s September 24, 2026 IYM file contains 39 direct equity positions. Linde is 19.01%, Newmont 11.31%, Freeport-McMoRan 9.16%, Ecolab 6.13%, and Air Products 4.50%. Its top ten sum to 67.67%, so its leading holdings make up a larger share than the top ten in the other two displayed snapshots. This is a property of this dated portfolio, not a promise about future concentration.

IYM tracks the Russell 1000 Basic Materials RIC 22.5/45 Capped Index. Its Russell 1000 parent set is narrower than MSCI US IMI’s full large-, mid-, and small-cap market coverage, but broader in concept than the S&P 500-only XLB parent. The 22.5/45 caps are checked at quarterly rebalance dates, not a guarantee that every live weight stays under the threshold every day. BlackRock’s current product page gives the 0.37% expense ratio and benchmark; the dated CSV gives positions and weights.

There is also a history detail for anyone reading long-term performance charts: IYM’s current benchmark did not define the entire historical series. BlackRock’s 2026 annual report says the spliced benchmark reflects the Dow Jones U.S. Basic Materials Index through September 19, 2021 and the Russell 1000 Basic Materials RIC 22.5/45 Capped Index beginning September 20, 2021. A backtest or fund chart that spans the change should not be described as if the current Russell index had governed every earlier year. See the SEC-filed annual report and the FTSE Russell code sheet.

To measure name-and-weight overlap, each issuer file was limited to direct common-stock rows. We matched exact ticker symbols and checked that issuer names were consistent; AMCR was the one identifier exception, handled as described above. Cash, money-market holdings, collateral, futures, and VAW’s TRS were excluded. For each shared ticker (i), the symmetric weight overlap is the smaller published weight, and the figure is the sum across shared names: Σ min(weight Aᵢ, weight Bᵢ). This estimates dollars per $100 of fund assets that could be allocated to the same direct equities; it is not return correlation, economic exposure, or a forecast.

The 14 same-date XLB–IYM tickers are ALB, APD, AVY, CF, ECL, FCX, IFF, IP, LIN, LYB, MOS, NEM, NUE, and STLD. For those names, XLB’s weights total 58.84% and IYM’s total 68.29%; the sum of the 14 smaller ticker weights is 51.84%. XLB–VAW’s 25 common names are all 25 XLB equity rows, but that is a September/August comparison. IYM–VAW has 29 common names, again on different dates. Those larger directional weights do not mean the pair is more synchronized or provides less diversification today.

All weights were rounded to two decimals for the reported overlap outputs, because VAW and IYM publish equity weights to that precision; XLB’s file has additional decimals, but the final results do not claim precision beyond the least precise source. The same-date comparison matches ticker/name only and the broad match counts assume each symbol identifies one listed equity. Holdings can change between dates, tickers can be reused, corporate actions can alter identifiers, and the snapshots do not measure derivatives or supply-chain exposure. No complete broad-market ETF overlap was computed.

A broad S&P 500 ETF such as VOO or SPY already owns S&P 500 materials companies, including names that can also appear in XLB. Adding XLB can therefore increase the weights of those same companies rather than add entirely new holdings. VAW can reach down to smaller U.S. materials companies through its MSCI IMI universe; a total-market fund such as VTI may own some of those as well. We did not calculate VOO, SPY, or VTI overlap because a matching-date full holdings set was outside this comparison. See the official VOO and VTI descriptions.

Materials also sit beside other sectors in business supply chains. Industrials may build equipment and infrastructure that use steel, chemicals, aggregates, and packaging; energy producers and utilities affect feedstock, power, and transport costs. That connects the economics of materials to funds such as XLI and XLE without making their equity baskets identical. To decide whether funds diversify one another, compare underlying stock weights at a common date and consider shared macro drivers—not just the sector names. The official XLI and XLE pages describe adjacent Select Sector benchmarks.

Current issuer pages show expense ratios of 0.08% for XLB, 0.09% for VAW (stated as of December 19, 2025), and 0.37% for IYM. On a hypothetical balance held flat at US$10,000 for one year, simple multiplication gives about US$8, US$9, and US$37 respectively. That is a fee illustration, not an invoice or return comparison: actual fund expenses accrue against changing assets, and the arithmetic excludes spreads, taxes, commissions, and any trading costs. Published dates also differ, so check each current prospectus before acting.

None of these equity ETFs is a direct claim on a fixed amount of copper, gold, fertilizer, or chemicals. A miner’s earnings can move differently from the commodity price because of grades, extraction costs, energy, labor, debt, hedging, taxes, and capital spending. Chemical and packaging firms may pass input costs through at different speeds. A larger stock count can soften single-name dependence but cannot remove sector cyclicality, company concentration, currency effects, or broad equity-market risk. ETF market prices can also differ from NAV, and trading spreads matter for realized cost.

Start with the exposure boundary you actually want. XLB is a capped GICS Materials sleeve drawn from the S&P 500; VAW extends the GICS basket across U.S. large, mid, and small caps; IYM selects from the Russell 1000 using ICB and its 22.5/45 RIC caps. Then compare the complete holdings—not only the first few names—using one date, stable identifiers, and a consistent treatment of cash and derivatives. If files are not synchronized, label the comparison by snapshot date as done here.

For an account-level check, multiply each ETF’s company weight by the amount invested in that ETF, then add the resulting dollars for every shared issuer. This look-through view reveals repeated positions that ticker-level fund counts hide. Check the prospectus fee, bid-ask spread, rebalance rules, and the fund’s non-equity lines before comparing “cost” or diversification. The calculations here describe published snapshots, not suitability or a recommendation to buy or sell any fund. For another dated sector-basket comparison, see XLE, VDE, and IYE.