What do the expense ratios of IYM and VAW mean, and how does a 0.28 percentage point difference affect long-term returns?

Expense ratio is the annual fee charged by a fund, deducted from assets. IYM charges 0.37%, while VAW charges 0.09% — a 0.28 percentage point difference. Over time, even small differences compound: higher fees reduce net growth. For example, on a $10,000 investment, 0.28% equates to £28 in annual costs saved. The lower fee in VAW may improve after-cost returns. Always consider fees alongside performance and holdings.

Both IYM and VAW list their tracked index as ‘not available’ – what does this imply for investors?

When an ETF’s underlying index is listed as ‘not available’, it limits transparency regarding the exact criteria used for stock selection and weighting. Investors cannot independently verify how closely the fund mirrors its benchmark. This may raise concerns about tracking consistency or methodology changes. For IYM and VAW, the lack of public index detail means due diligence relies more on holdings and performance data.

How do IYM and VAW differ in terms of operational history and fund maturity?

IYM was launched on 12 June 2000, giving it over 25 years of operational history. VAW began on 26 January 2004, offering a shorter but still substantial track record. A longer history may provide more confidence in how the fund behaves across various market cycles, though it does not guarantee future stability.

How similar are the top holdings of IYM and VAW, and what does this overlap suggest about sector exposure?

IYM and VAW share six top-10 holdings: LIN, NEM, FCX, ECL, APD, and NUE. This overlap indicates both funds provide broad exposure to major materials companies. While LIN is heavily weighted in both (18.69% in IYM, 14.57% in VAW), other holdings vary slightly. The shared exposure suggests similar sector positioning.

What are the dividend yields of IYM and VAW, and how might these influence income-focused investors?

VAW has a dividend yield of 1.42%, slightly higher than IYM’s 1.27%. Dividends are not guaranteed and may vary. Yield is calculated on trailing payments divided by current price. For income-focused investors, a higher yield can be attractive, but it should be assessed alongside fund cost and holdings stability.

Why might a larger net asset base benefit investors in materials ETFs like VAW compared to smaller ones like IYM?

VAW holds $3.0 billion in net assets, compared to IYM’s $1.1 billion. A larger asset base often supports greater liquidity, lower bid-ask spreads, and more efficient rebalancing. Smaller funds like IYM may experience higher trading costs or less frequent portfolio adjustments, potentially affecting returns and flexibility.

How do the materials ETFs IYM and VAW reflect different concentration risks in the top holdings?

IYM has greater top-weight concentration: LIN accounts for 18.69% of the fund. In contrast, VAW’s largest holding, LIN, is 14.57%. While both funds are diversified across major names, IYM carries slightly higher idiosyncratic risk tied to its heaviest-weighted stock.

What role do materials companies like LIN, FCX, and NEM play in the portfolios of IYM and VAW?

LIN (Linde PLC), FCX (Freeport-McMoRan), and NEM (Newmont Corporation) appear in both funds’ top holdings. These companies represent core components of the materials sector, providing exposure to chemicals, mining, and precious metals. Their presence underscores the funds’ focus on essential industrial and natural resource inputs.

What does the term ‘net assets’ refer to, and why are it significant in comparing IYM and VAW?

Net assets represent the total market value of a fund’s holdings minus liabilities. VAW has $3.0 billion in net assets, while IYM has $1.1 billion. Larger net assets generally indicate greater investor confidence, better liquidity, and more efficient fund management. It may influence how easily you can buy or sell shares.

Given that both funds track the materials sector, how should investors align their choice with long-term goals?

Investors should consider factors like cost, liquidity, and dividend income when choosing between IYM and VAW. Those prioritising lower fees and higher liquidity may find VAW more suitable. IYM’s longer track record may appeal to investors valuing historical consistency, though sector exposure is largely similar.

How do fees and dividend yields combine to shape the overall value proposition of IYM and VAW?

IYM has a 0.37% expense ratio and 1.27% dividend yield; VAW has 0.09% and 1.42%. While yields are close, VAW’s significantly lower cost enhances net return potential. Fee differences of this scale can compound over decades.

IYM vs VAW

Two funds, one decision: we compare cost, performance and what each ETF actually holds in September 2026.

Compare IYM and VAW to understand fees, holdings, dividends, and how each fund tracks its market. IYM has a 0.37% expense ratio, while VAW is lower at 0.09%. Both focus on materials with shared top holdings like LIN and FCX. Educational content, not financial advice.

Fund Snapshot

Key Fund Metrics

IYM

Metric

VAW

0.37%

Expense Ratio

0.09%

1.27%

Dividend Yield

1.42%

$1.09B

Net Assets

$3.05B

Holdings

114

Jun 12, 2000

Inception Date

Jan 26, 2004

–

Index Tracked

–

Natural Resources

Fund Category

Natural Resources

VAW costs about $28.00 less per year for every $10,000 invested.

Shared Top Holdings

Holding	IYM	VAW
LINLinde plc	18.69%	14.57%
NEMNewmont Corporation	11.50%	8.58%
FCXFreeport-McMoRan Inc.	9.09%	7.00%
ECLEcolab Inc.	5.99%	4.61%
APDAir Products and Chemicals, Inc.	4.49%	4.14%
NUENucor Corporation	4.12%	3.57%

Discover More Comparisons

IYM vs XLB

Compare IYM and XLB on expense ratios, holdings, and yields. IYM costs 0.37%, XLB 0.08%. XLB yields 1.72%, IYM 1.27%. Review these metrics for analysis.

Investment Analysis

IYM

Pros

Investors gain exposure to prominent materials companies like LIN and NEM.
The fund maintains a dividend yield of 1.27% for potential income.
A long inception history dating back to 2000 offers extensive operational context.

Considerations

The expense ratio is relatively high at 0.37% for a passive ETF.
Assets under management of $1.1 billion are smaller than some competitors.
Top holdings concentration might increase idiosyncratic risk within the sector.

VAW

Pros

The expense ratio is low at 0.09%, enhancing net returns potential.
Net assets of $3.0 billion suggest greater liquidity and stability.
Dividend yield of 1.42% is slightly higher than the comparison fund.

Considerations

Launched in 2004, it has a shorter operational history than Fund A.
Holding weight in top constituent LIN is notably less concentrated at 14.57%.
The index tracked is listed as not available, creating slight opacity.

About IYM and VAW

IYM (IYM)

The iShares U.S. Basic Materials ETF (IYM) offers investors exposure to the fundamental building blocks of the modern economy. As a sector-specific fund, it tracks a basket of companies involved in the exploration, mining, processing, and sale of raw materials, including chemicals, metals, and mining operations. With 43 holdings, this ETF provides a focused view of the U.S. materials industry, which often plays a crucial role in global supply chains and infrastructure development. The fund has a dividend yield of 1.27% and an expense ratio of 0.37%. While basic materials can be sensitive to economic cycles and commodity prices, they are essential for manufacturing, construction, and technology. Investors should note that sector performance can fluctuate based on global demand, regulatory changes, and operational costs, meaning values can rise and fall. This fund is suitable for those seeking targeted industry exposure within a broader diversified portfolio.

VAW (VAW)

The Vanguard Materials ETF offers investors a straightforward way to gain exposure to the materials sector. By holding 114 companies involved in mining, chemical production, construction materials, and other resource-related industries, this fund aims to mirror the performance of its underlying benchmark. With a low expense ratio of 0.09% and net assets of USD 3.05 billion, it provides cost-effective access to this cyclical area of the market. The fund currently has a dividend yield of 1.42%, reflecting the income generated by its holdings. As with any sector-specific investment, values can rise and fall, and returns are not guaranteed. Investors interested in the materials sector should consider their overall portfolio diversification and risk tolerance before making decisions.

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IYM vs VAW

Fund Snapshot

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IYM vs XLB

Investment Analysis

IYM

Pros

Considerations

VAW

Pros

Considerations

About IYM and VAW

Buy IYM or VAW in Nemo

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Trusted & Regulated

6% Interest on Cash

Frequently asked questions

What do the expense ratios of IYM and VAW mean, and how does a 0.28 percentage point difference affect long-term returns?

Both IYM and VAW list their tracked index as ‘not available’ – what does this imply for investors?

How do IYM and VAW differ in terms of operational history and fund maturity?

How similar are the top holdings of IYM and VAW, and what does this overlap suggest about sector exposure?

What are the dividend yields of IYM and VAW, and how might these influence income-focused investors?

Why might a larger net asset base benefit investors in materials ETFs like VAW compared to smaller ones like IYM?

How do the materials ETFs IYM and VAW reflect different concentration risks in the top holdings?

What role do materials companies like LIN, FCX, and NEM play in the portfolios of IYM and VAW?

What does the term ‘net assets’ refer to, and why are it significant in comparing IYM and VAW?

Given that both funds track the materials sector, how should investors align their choice with long-term goals?

How do fees and dividend yields combine to shape the overall value proposition of IYM and VAW?

Fund Snapshot

About IYM and VAW

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IYM vs XLB