PSCM vs XME

PSCMCInvesco S&P SmallCap Materials ETF

XMEBState Street SPDR S&P Metals & Mining ETF

In short

PSCM Materials, but small. Where the big sector funds lean on large-cap chemical majors, PSCM sticks to small-cap US materials companies (chemicals, packaging, metals and mining) for 0.29% a year.

XME Not the chemicals-heavy materials fund. XME holds roughly 40 miners and steelmakers on a modified equal weight, so a small copper name carries about the weight of a giant. Ore, coal and metal, since 2006.

Stated mandate

PSCM The fund tracks an index measuring the performance of securities of US basic materials companies.

XME The fund seeks to track, before fees and expenses, the total return performance of the S&P Metals and Mining Select Industry Index.

Why people hold it

• PSCM A size slice most materials funds don't offer: US small caps only, materials only, no drift into large caps or overseas names.invesco.com
• 0.29% a year, below the median expense ratio among broad materials ETFs.
• Live since 2010, so it has traded through full commodity cycles rather than launching into one. Pays quarterly.

• XME Pure play on the metals and mining slice: aluminum, coal, copper, gold, precious metals, silver and steel sub-industries, not the whole materials sector.ssga.com
• Modified equal weighting spreads exposure across large, mid and small caps, so the biggest miners don't set the tone for the whole portfolio.ssga.com
• One of the more actively traded funds in its corner of the market, and a multi-billion-dollar fund that has been running since 2006.
• 0.35% expense ratio, slightly under the median for the materials funds we grade, which is unusual for a narrow industry sleeve.

Worth knowing

• PSCM Thinly traded with a small asset base. Spreads can widen, so the fill price can matter more than the expense ratio.
• Roughly two dozen holdings, so one name can move the whole fund, and small-cap materials swing with the commodity cycle.
• For the whole materials sector instead of the small-cap corner, XLB, VAW and FMAT are broader, far more traded, and cheaper.

• XME Broad materials funds cost far less: XLB at 0.08% and VAW at 0.09%. They also own a very different mix, chemicals and packaging included.
• About 40 names, many of them smaller miners, in one cyclical industry. Swings run wider than a diversified sector fund's.
• The portfolio's fortunes track commodity cycles in steel, coal, copper and gold rather than broad industrial demand.ssga.com

Full PSCM profile⁠

Full XME profile⁠