MXI vs VAW

MXICiShares Global Materials ETF

VAWBVanguard Materials ETF

In short

MXI Most materials funds stop at the US border. MXI doesn't: it tracks a global materials index, putting overseas miners, chemical makers and packagers next to the American names, and has done so since 2006.

VAW Vanguard's materials aisle in one ticker: chemicals, packaging and metals, roughly 120 names deep, for 0.09% a year while the category norm sits several times higher.

Stated mandate

MXI The fund seeks to track an index made up of global equities from the materials sector.

VAW The fund seeks to track a materials-sector equity benchmark through passive indexing and normally invests at least 80% of assets in the benchmark's stocks.

Why people hold it

• MXI Global by design. The fund tracks the S&P Global 1200 Materials Index, so companies listed outside the US carry real weight instead of appearing as an afterthought.ishares.com
• Running since 2006 under the iShares banner, with roughly 90 holdings spread across the sector rather than a top-heavy handful of megacaps.
• The 0.37% fee sits near the middle of the materials-fund pack, and here it buys worldwide coverage rather than a US-only slice of the sector.

• VAW Charges 0.09% a year, several times below the median for broad materials funds. Cheap enough that cost stops being the argument.
• Holds about 120 stocks from MSCI's US Investable Market materials index, so it reaches down the cap ladder instead of stopping at the biggest names.
• Plain passive indexing, at least 80% in benchmark stocks, and it has tracked that benchmark closely. One of the stronger builds in the materials group.
• Trading since 2004 and now a multi-billion-dollar fund, run by Vanguard's index desk. Distributions arrive quarterly.

Worth knowing

• MXI The US-only options (XLB, VAW, FMAT) charge a fraction of this fee. The global mandate is what the extra cost is buying.
• Trading is thin next to the big US sector funds, so spreads can widen. That bites hardest on large or hurried orders.
• One sector, and a commodity-linked one: the whole portfolio rides global industrial demand with nothing else to cushion it.

• VAW One sector, and a cyclical one. Chemicals, miners and packagers ride construction and industrial demand, so swings run wider than a total-market fund.
• Moderately traded rather than a volume monster, so spreads can widen in fast markets.
• XLB and FMAT sit a basis point lower at 0.08%. A rounding error, but it exists.

Full MXI profile⁠

Full VAW profile⁠