Materials Select Sector SPDR Fund (XLB): Complete Beginner's Guide
Last updated: March 2026 • State Street Global Advisors • Materials Sector
Expense Ratio
0.09%
AUM
$6.0B
Dividend Yield
1.80%
Inception
1998
Beginner Score
7.5/10
What is Materials Select Sector SPDR Fund?
XLB holds the materials sector companies from the S&P 500, including chemical producers, mining companies, packaging firms, and building materials makers. Materials companies provide the raw inputs that other industries need to manufacture their products. Beginners should know that XLB is a cyclical, commodity-sensitive fund that tends to do well when the economy is growing and commodity prices are rising.
XLB is managed by State Street Global Advisors and has been available since 1998. With $6.0B in assets under management, it's a growing fund that has attracted significant investor interest. The fund charges an expense ratio of 0.09%, which means for every $10,000 you invest, you pay approximately $9 per year in management fees.
XLB at a Glance — Key Metrics
| Expense Ratio | 0.09% |
| Total Holdings | 28 |
| P/E Ratio | 20.5 |
| Beta | 1.08 |
| Dividend Yield | 1.80% |
| AUM | $6.0B |
| Inception Year | 1998 |
| Issuer | State Street Global Advisors |
Top 10 Holdings in XLB
XLB holds 28 different securities. Here are the largest positions that make up the core of this fund:
| # | Company | Ticker | Weight |
|---|---|---|---|
| 1 | Linde PLC | LIN | 18.80% |
| 2 | Sherwin-Williams Co. | SHW | 9.80% |
| 3 | Air Products & Chemicals | APD | 6.50% |
| 4 | Ecolab Inc. | ECL | 5.80% |
| 5 | Freeport-McMoRan Inc. | FCX | 5.50% |
| 6 | Newmont Corp. | NEM | 5.20% |
| 7 | Dow Inc. | DOW | 4.80% |
| 8 | Nucor Corp. | NUE | 4.20% |
| 9 | International Flavors | IFF | 3.80% |
| 10 | Vulcan Materials Co. | VMC | 3.50% |
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XLB Performance History
Here's how XLB has performed over different time periods. Remember that past performance doesn't guarantee future results, but it gives you a sense of the fund's track record:
YTD
1.50%
1 Year
11.80%
3 Year
6.50%
5 Year
9.50%
10 Year
8.20%
Beginner Suitability Score: 7.5/10
Our proprietary Beginner Suitability Score evaluates ETFs based on five factors that matter most to new investors: fees, volatility, diversification, dividend history, and track record length.
XLB scores 7.5/10 because it has very low fees, can be more volatile than the broader market, focuses on 28 selected holdings, and has been available since 1998, giving it a proven track record.
How to Buy XLB — Step by Step
- Open a brokerage account — We recommend Fidelity, Charles Schwab, or Vanguard for ETF investing. All offer $0 commissions on ETF trades.
- Fund your account — Transfer money from your bank. You can start with as little as $1 if your broker offers fractional shares.
- Search for "XLB" — Use the search bar in your brokerage platform to find Materials Select Sector SPDR Fund.
- Place your order — Choose "Market Order" for simplicity or "Limit Order" if you want to set a specific price. Enter how many shares (or dollar amount) you want to buy.
- Set up automatic investing — Most brokers let you schedule recurring purchases (e.g., $100/month on the 1st). This is dollar cost averaging in action.
Dollar Cost Averaging Into XLB
Here's what consistent monthly investing could look like over time, assuming an average annual return of 8% (approximate historical stock market average):
| Monthly | 10 Years | 20 Years | 30 Years |
|---|---|---|---|
| $100/mo | $18,417 | $59,295 | $150,030 |
| $250/mo | $46,041 | $148,237 | $375,074 |
| $500/mo | $92,083 | $296,474 | $750,148 |
*Projections assume 8% average annual return with monthly compounding. Actual returns will vary. Past performance doesn't guarantee future results.
Fee impact: With XLB's expense ratio of 0.09%, a $10,000 investment would lose approximately $771 to fees over 20 years compared to a zero-fee investment. This is a reasonable fee level for the value provided.
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Pros and Cons of XLB
Pros
- ✓Provides exposure to commodity-sensitive companies that benefit from rising material prices
- ✓Low 0.09% expense ratio for targeted access to the S&P 500 materials sector
- ✓Materials stocks can act as an inflation hedge since raw material prices often rise with inflation
- ✓Benefits from infrastructure spending and global construction activity
Cons
- ✗Heavily concentrated in Linde, which alone represents nearly 19% of the fund
- ✗Highly cyclical and dependent on commodity prices and global economic growth
- ✗Smallest sector SPDR by assets, reflecting limited investor interest compared to other sectors
XLB vs Similar ETFs
See how XLB stacks up against similar funds:
Frequently Asked Questions
Is XLB a good ETF for beginners?▾
XLB has a Beginner Suitability Score of 7.5/10 on our scale. This makes it a strong choice for new investors due to its low fees and focused strategy.
What is the expense ratio of XLB?▾
XLB has an expense ratio of 0.09%. This means for every $10,000 you invest, you pay approximately $9 per year in fees. This is considered very low and cost-efficient.
How much money do I need to invest in XLB?▾
You can invest in XLB with as little as $1 through brokers that offer fractional shares (like Fidelity, Schwab, or Robinhood). There is no minimum investment required beyond the share price itself, which changes daily. Dollar cost averaging — investing a fixed amount regularly — is a popular strategy.
Does XLB pay dividends?▾
Yes, XLB pays dividends with a current yield of approximately 1.80%. Dividends are typically paid quarterly and can be reinvested automatically through most brokers.
What are the top holdings in XLB?▾
The top holdings in XLB include Linde PLC (18.80%), Sherwin-Williams Co. (9.80%), Air Products & Chemicals (6.50%), and more. The fund holds 28 total positions, providing focused exposure to selected companies.