SLX vs VAW

SLXDVanEck Steel ETF

VAWBVanguard Materials ETF

In short

SLX Most materials funds hand you chemicals, paint and packaging. SLX skips all that for steel alone: roughly 40 mills and miners worldwide, tracked by index 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

SLX The fund seeks to track, before fees and expenses, the price and yield performance of the MarketVector Global Steel Index, representing companies involved in the global steel segment.

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

• SLX Pure steel, not diluted. It tracks the MarketVector Global Steel Index, roughly 40 companies in the steel segment, instead of a broad materials basket.vaneck.com
• Global by design: the index reaches steel companies listed outside the US, so exposure is not tied to one country's mills.vaneck.com
• Launched in 2006 and run as a passive index fund, it has carried the same single-industry mandate through multiple steel cycles.

• 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

• SLX The specialty focus comes at a specialty price: 0.55% a year, versus 0.08% for XLB and 0.09% for VAW on the broad materials side.
• One industry, about 40 names. Results ride on the global steel segment rather than the wider materials sector, and holdings are spread across foreign markets.
• Cash comes back once or twice a year, not monthly, and the fund sits on the smaller, moderately traded end of its category.

• 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 SLX profile⁠

Full VAW profile⁠