What Is XLB? State Street Materials Select Sector SPDR ETF
Last updated September 2026
Short answer
XLB is State Street Materials Select Sector SPDR ETF, an ETF that tracks the Materials Select Sector Index at a 0.08% expense ratio. XLB covers the materials sector of the S&P 500, and its shape is defined by one position: Linde at 14.0%, roughly two and a half times the next holding. Linde sells industrial gases under long-duration take-or-pay contracts, which makes the fund's largest exposure one of the least cyclical businesses in a sector known for cyclicality. Below it sit Newmont at 5.8%, Freeport-McMoRan at 5.3%, Corteva at 5.0% and Sherwin-Williams at 4.9%. State Street charges 0.08%, the fund holds $8.2B, distributes 1.67% and dates from 1998.
XLB is issued by State Street SPDR and tracks the Materials Select Sector Index. It charges a 0.08% expense ratio, holds approximately $8.2B in assets under management, yields about 1.67%, and launched in 1998.
Linde at 14% is not a commodity bet
Industrial gases are sold through pipelines and on-site plants built next to a customer's facility, under contracts that often run fifteen years or more with minimum volume obligations and cost pass-throughs. That produces revenue closer to a utility's than to a miner's. It is a durable, high-return business with substantial barriers to entry, and it is the single biggest thing XLB owns.
Air Products and Chemicals at 4.6% runs a similar model, so the two industrial gas companies together are about 18.6% of the fund. Add Ecolab at 4.7%, which sells cleaning and water treatment chemicals on service contracts, and Sherwin-Williams at 4.9%, a branded paint retailer, and roughly 28% of the fund is in businesses with recurring revenue characteristics.
This matters because investors often buy a materials fund as a commodity-cycle vehicle and are surprised that it does not track commodity prices closely. The largest holdings are specialty and contracted businesses. The commodity exposure exists but sits in the middle of the portfolio, not at the top.
Three different industries share one sector label
The first group is chemicals and gases: Linde, Air Products, Ecolab, Sherwin-Williams and Corteva at 5.0%, the last an agricultural seed and crop protection business whose drivers are planted acreage and farm income rather than industrial production.
The second is mining. Newmont at 5.8% is a gold producer, so its results turn on the gold price and on mine cost inflation. Freeport-McMoRan at 5.3% is primarily copper, tied to global industrial demand and electrification. Together they are about 11.1% of the fund and are the part that behaves like a commodity holding.
The third is construction materials: Vulcan Materials at 4.7%, Martin Marietta at 4.5% and CRH at 4.7%, roughly 13.9% between them. Aggregates and cement are local monopolies in practice, because rock is expensive to transport. Their demand comes from infrastructure spending, highway funding and non-residential construction, which follows a slower and more policy-driven cycle than metals.
Cost, concentration and a long record
0.08% is the standard Select Sector SPDR fee and is among the cheapest ways to buy a single sector. The 1998 launch means the fund has traded through the commodity supercycle of the 2000s, the 2008 collapse in industrial demand, the 2014 to 2016 energy and mining downturn and the post-2020 inflation episode, which is a long and varied record for a sector fund.
The concentration is the thing to size correctly. The top ten holdings are about 58.2% of the fund, and the sector itself is one of the smallest weights in the S&P 500. This means XLB is a narrow instrument. It gives you the whole materials sector at a low price, but that sector is a short list of companies.
The 1.67% yield is unremarkable. Materials companies distribute moderately and reinvest heavily in mines, plants and quarries, which are capital-intensive assets with long lead times. Anyone buying XLB for income is buying the wrong tool; the sector's appeal is cyclicality and inflation sensitivity, not payout.
XLB holdings: top 10
Approximate weights as of August 2026. Each ticker links to its individual stock guide in Walnut.
How do I invest in XLB?
There are three common ways to get XLB exposure. Buy shares (or fractional shares) of XLB directly at any major broker that lists it. Hold it as a core position and layer more concentrated ideas on top. Or build it into a thematic portfolio in Walnut, so XLB sits alongside other holdings that express the same thesis, with target weights you can rebalance toward. XLB trades like a stock during market hours, so you buy it the same way you would any listed share.
New to buying funds? See how to buy an ETF, step by step.
Is XLB a good buy?
Whether XLB is a good buy depends less on any single call and more on your time horizon and what you already hold: it tracks the Materials Select Sector Index, so the real question is whether you want that exposure in your mix and at what weight. We walk through valuation, concentration, and what would have to be true for it to outperform from here in is XLB a buy?
The bottom line on XLB
XLB gives you the Materials Select Sector Index exposure in one ticker at a 0.08% expense ratio. Most investors use it as a core holding and layer more concentrated thematic portfolios on top.
More on XLB
Whether XLB is worth buying today depends more on your time horizon and what you already hold than on any single call. We walk through valuation, concentration, and what would have to be true for it to outperform from here in is XLB a buy?
XLB yields 1.67% as of August 2026, paid by passing through the dividends of its underlying holdings. For the payout schedule, history, and how the distributions are taxed, see XLB dividend: yield and schedule.
New to funds like XLB? Start with what an ETF is, then how to buy an ETF, or browse the full guide to ETF investing.
Wondering how XLB fits the portfolio you already own? Walnut is an AI investing app that connects your brokerage read-only and answers questions like that about your actual holdings: overlap, concentration, and how each position tracks the S&P 500. Compare the best AI portfolio analyzers or see the best AI investing apps in 2026.
Investing in XLB with AI
Connect the broker you already use and ask Walnut's AI how XLB fits what you actually hold: what it overlaps with, what it leaves you exposed to, and how it has tracked the S&P 500. Read-only by default, and you approve anything before it reaches your broker.
FAQ
What does XLB actually own?
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The materials constituents of the S&P 500, which fall into three groups: industrial gas and specialty chemical companies such as Linde, Air Products, Ecolab and Sherwin-Williams; miners including Newmont in gold and Freeport-McMoRan in copper; and construction materials producers such as Vulcan Materials, Martin Marietta and CRH. Corteva adds agricultural inputs. The top ten are roughly 58.2% of the fund.
Why is Linde 14% of the fund?
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Because the Select Sector indexes weight by market value within the sector, and Linde is by some distance the largest materials company in the S&P 500. It sells industrial gases under long-term contracts with minimum volume commitments, which is a stable, high-return business. The result is that the fund's largest exposure is also one of its least cyclical.
Does XLB give me gold exposure?
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Some, through Newmont at 5.8%, but that is a gold mining company rather than the metal. Miners carry operational risks the metal does not: cost inflation, ore grade decline, permitting and country risk. Their share prices are geared to the gold price but do not track it. If direct metal exposure is the aim, a bullion fund does that job far more precisely.
How does XLB differ from a mining ETF?
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A mining fund holds producers of metals and minerals almost exclusively, so it moves with commodity prices. XLB holds miners as roughly 11% of the portfolio, with the rest in gases, specialty chemicals, paints, crop inputs and aggregates. The two behave quite differently, and confusing them is the most common misreading of what a materials sector fund provides.
Is XLB a commodity fund?
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No. It holds shares in companies that produce or process materials, not the materials themselves. Company results depend on volumes, contract terms, cost control and capital spending as well as on prices. A commodity futures fund tracks price directly and has no operating leverage, no dividends and a different tax treatment. The two serve different purposes.
What drives results across the sector?
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Industrial production and construction activity set volumes. Input costs, particularly energy and freight, set margins. For the miners, metal prices dominate. For aggregates producers, infrastructure and highway funding matters more than the industrial cycle. For the gas and specialty chemical companies, contract escalators and pass-through clauses mute much of the volatility that affects the rest.
Why is the yield only 1.67%?
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Materials companies are capital intensive and reinvest heavily in plants, mines and quarries with long build times. Dividends are typically moderate and are held stable through cycles rather than raised aggressively. The sector's investment case rests on cyclicality and inflation sensitivity rather than on income, and 1.67% is consistent with that.
How much materials exposure does an S&P 500 fund already give me?
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A small single-digit percentage, since materials is one of the smaller sectors in the index. Adding XLB is therefore a deliberate overweight rather than filling a gap. Because the sector is a short list of companies and the top ten are roughly 58.2% of the fund, that overweight is concentrated in a handful of businesses.
What is XLB's expense ratio?
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XLB has an expense ratio of 0.08% per year as of August 2026, charged by State Street SPDR and deducted from the fund's value rather than billed to you separately. On a $10,000 position that is roughly $8 a year. Fees compound over time, so on a long-term holding the expense ratio is one of the few return drivers you control. It is worth comparing against other funds that track the Materials Select Sector Index before you choose.
How do I compare XLB to similar ETFs?
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Put a few fields side by side: the expense ratio (fees compound over decades), the index or strategy it tracks, the top holdings and how much they overlap with what you already own, the dividend yield, and the AUM, liquidity, and bid-ask spread that affect trading costs. For index funds, tracking error (how closely it follows its index) and tax efficiency matter too. XLB's figures are above; the full method is in Walnut's guide on how to compare ETFs.
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Walnut is informational, not investment advice. Holdings weights and fund statistics on this page are approximations stamped to August 2026; verify current figures against State Street SPDR's fund page or your broker before investing.