IYM vs. XLB

Last updated Jun 5, 2026

IYM (iShares U.S. Basic Materials ETF) and XLB (Materials Select Sector SPDR ETF) are both Materials funds - IYM tracks the Dow Jones U.S. Basic Materials Index while XLB tracks the Materials Select Sector Index. Both are passively managed. Over the past 10 years, IYM returned 10.92%/yr vs 10.12%/yr for XLB. Their correlation of 0.95 suggests significant overlap in exposure. IYM charges 0.42%/yr vs 0.13%/yr for XLB.

Performance

IYM vs. XLB - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in iShares U.S. Basic Materials ETF (IYM) and Materials Select Sector SPDR ETF (XLB). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, IYM achieves a 22.18% return, which is significantly higher than XLB's 14.33% return. Over the past 10 years, IYM has outperformed XLB with an annualized return of 10.92%, while XLB has yielded a comparatively lower 10.12% annualized return.

IYM

• 1D: 0.10%
• 1M: 3.09%
• YTD: 22.18%
• 6M: 27.03%
• 1Y: 37.82%
• 3Y*: 16.01%
• 5Y*: 7.84%
• 10Y*: 10.92%

XLB

• 1D: -0.02%
• 1M: 0.17%
• YTD: 14.33%
• 6M: 17.82%
• 1Y: 19.52%
• 3Y*: 11.73%
• 5Y*: 5.35%
• 10Y*: 10.12%

*Multi-year figures are annualized to reflect compound growth (CAGR)

IYM vs. XLB - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
IYM iShares U.S. Basic Materials ETF	22.18%	20.41%	-4.54%	12.83%	-9.15%	25.62%	17.87%	19.22%	-16.63%	24.83%
XLB Materials Select Sector SPDR ETF	14.33%	9.94%	0.15%	12.46%	-12.30%	27.44%	20.46%	24.13%	-14.88%	24.01%

Correlation

The correlation between IYM and XLB is 0.94, indicating a strong positive relationship between their price movements. Combining them offers limited diversification - they tend to fall together during downturns.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.94
Correlation (3Y) Calculated over the trailing 3-year period	0.96
Correlation (5Y) Calculated over the trailing 5-year period	0.96
Correlation (10Y) Calculated over the trailing 10-year period	0.97
Correlation (All Time) Calculated using the full available price history since Jun 21, 2000	0.95

The correlation between IYM and XLB has been stable across timeframes, ranging from 0.94 to 0.97 - a consistent structural relationship.

IYM vs. XLB - Sectors Allocation Comparison

Sectors	IYM	XLB
Basic Materials	85.4%	87.6%
Industrials	11.4%	1.5%
Consumer Cyclical	3.2%	12.4%
Communication Services	-	-
Consumer Defensive	-	-
Energy	-	-
Financial Services	-	-
Healthcare	-	-
Real Estate	-	-
Technology	-	-
Utilities	-	-

Return for Risk

IYM vs. XLB — Risk / Return Rank

Compare risk-adjusted metric ranks to identify better-performing investments over the past 12 months.

IYM

IYM Risk / Return Rank: 59
IYM Sharpe Ratio Rank: 62
IYM Sortino Ratio Rank: 58
IYM Omega Ratio Rank: 56
IYM Calmar Ratio Rank: 58
IYM Martin Ratio Rank: 60

XLB

XLB Risk / Return Rank: 33
XLB Sharpe Ratio Rank: 33
XLB Sortino Ratio Rank: 33
XLB Omega Ratio Rank: 31
XLB Calmar Ratio Rank: 33
XLB Martin Ratio Rank: 34

The rank (0–100) shows how this investment's returns compare to the risk taken. Higher = better. Based on the past 12 months of data, combining Sharpe, Sortino, and other metrics used by quantitative funds and institutional investors.

IYM vs. XLB - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for iShares U.S. Basic Materials ETF (IYM) and Materials Select Sector SPDR ETF (XLB). Risk-adjusted metrics are performance indicators that assess an investment's returns in relation to its risk, enabling a more accurate comparison of different investment options.

	IYM	XLB	Difference
Sharpe ratio: Return per unit of total volatility	2.04	1.17	+0.87
Sortino ratio: Return per unit of downside risk	2.71	1.72	+0.99
Omega ratio: Gain probability vs. loss probability	1.34	1.20	+0.14
Calmar ratio: Return relative to maximum drawdown	2.79	1.58	+1.21
Martin ratio: Return relative to average drawdown	10.62	4.93	+5.69
Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month.

IYM vs. XLB - Sharpe Ratio Comparison

The current IYM Sharpe Ratio is 2.04, which is higher than the XLB Sharpe Ratio of 1.17. The chart below compares the historical Sharpe Ratios of IYM and XLB, calculated using daily returns over the previous 12 months. A higher Sharpe Ratio indicates better risk-adjusted performance relative to the risk-free rate.

Sharpe Ratios by Period

	IYM	XLB	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	2.04	1.17	+0.87
Sharpe Ratio (5Y) Calculated over the trailing 5-year period	0.39	0.28	+0.10
Sharpe Ratio (10Y) Calculated over the trailing 10-year period	0.50	0.49	+0.01
Sharpe Ratio (All Time) Calculated using the full available price history	0.34	0.36	-0.02

Drawdowns

IYM vs. XLB - Drawdown Comparison

The maximum IYM drawdown since its inception was -67.78%, which is greater than XLB's maximum drawdown of -59.83%. Use the drawdown chart below to compare losses from any high point for IYM and XLB.

Drawdown Indicators

	IYM	XLB	Difference
Max Drawdown Largest peak-to-trough decline	-67.78%	-59.83%	-7.95%
Max Drawdown (1Y) Largest decline over 1 year	-13.61%	-12.38%	-1.23%
Max Drawdown (3Y) Largest decline over 3 years	-23.62%	-23.17%	-0.45%
Max Drawdown (5Y) Largest decline over 5 years	-29.94%	-24.72%	-5.22%
Max Drawdown (10Y) Largest decline over 10 years	-42.76%	-37.27%	-5.49%
Current Drawdown Current decline from peak	-0.78%	-3.30%	+2.52%
Average Drawdown Average peak-to-trough decline	-11.45%	-10.84%	-0.61%
Ulcer Index Depth and duration of drawdowns from previous peaks	3.57%	3.97%	-0.40%

Volatility

IYM vs. XLB - Volatility Comparison

iShares U.S. Basic Materials ETF (IYM) has a higher volatility of 6.34% compared to Materials Select Sector SPDR ETF (XLB) at 5.47%. This indicates that IYM's price experiences larger fluctuations and is considered to be riskier than XLB based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	IYM	XLB	Difference
Volatility (1M) Calculated over the trailing 1-month period	6.34%	5.47%	+0.87%
Volatility (6M) Calculated over the trailing 6-month period	14.85%	12.81%	+2.04%
Volatility (1Y) Calculated over the trailing 1-year period	18.64%	16.75%	+1.89%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	20.37%	18.94%	+1.43%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	21.70%	20.64%	+1.06%

IYM vs. XLB - Expense Ratio Comparison

IYM has a 0.42% expense ratio, which is higher than XLB's 0.13% expense ratio.

Dividends

IYM vs. XLB - Dividend Comparison

IYM's dividend yield for the trailing twelve months is around 1.24%, less than XLB's 1.69% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
IYM iShares U.S. Basic Materials ETF	1.24%	1.51%	1.65%	1.77%	2.14%	1.48%	1.39%	2.08%	1.68%	1.43%	1.47%	2.04%
XLB Materials Select Sector SPDR ETF	1.69%	1.92%	1.92%	2.00%	2.26%	1.62%	1.72%	1.98%	2.20%	1.66%	1.95%	2.24%

Frequently Asked Questions

Can I hold both IYM and XLB in my portfolio?

With a correlation of 0.94, IYM and XLB move almost identically. Holding both adds very little diversification - you're essentially doubling your position in the same market segment. Choosing one is usually more capital-efficient.

Which is riskier, IYM or XLB?

IYM has higher volatility (6.34%) compared to XLB (5.47%). In terms of maximum drawdown, IYM dropped -67.78% vs XLB's -59.83%.

Which ETF is better, IYM or XLB?

On 10-year performance, IYM leads with 10.92% vs 10.12% for XLB. On fees, XLB is cheaper at 0.13% per year. On volatility, XLB has been the lower-risk option at 5.47%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, IYM or XLB?

Over the 10-year period, IYM has performed better with a 10.92% return vs 10.12%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, IYM or XLB?

XLB is cheaper with a 0.13% expense ratio, compared with 0.42% for IYM.

Which ETF pays a higher dividend yield, IYM or XLB?

XLB has the higher dividend yield at 1.69%, compared with 1.24% for IYM.

What is the main difference between IYM and XLB?

IYM tracks Dow Jones U.S. Basic Materials Index, while XLB tracks Materials Select Sector Index. They also come from different issuers: iShares and State Street. Their fees differ too: 0.42% for IYM and 0.13% for XLB.

Which has better risk-adjusted returns?

IYM currently has the higher Sharpe Ratio (2.04 vs 1.17), meaning it's delivered slightly more return per unit of risk over the trailing 12 months. However, this ranking shifts over time - use the Risk/Return Score above for a more comprehensive view that combines Sharpe, Sortino, and other measures used by quantitative funds.