XLB vs XME

XLBAState Street Materials Select Sector SPDR ETF

XMEBState Street SPDR S&P Metals & Mining ETF

In short

XLB The original materials play. A 1998-vintage slice of the S&P 500's chemical, mining, packaging and building-materials names, run at eight basis points and traded in size all day long.

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

XLB The fund seeks to track, before expenses, the price and yield performance of the Materials Select Sector Index.

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

• XLB Charges 0.08% a year against a peer-group median of 0.38%, and nothing in the cohort undercuts it (FMAT matches).
• Trading since December 1998 as one of the original Select Sector SPDRs, with a multi-billion-dollar asset base behind it.sec.gov
• Very actively traded for a sector fund, which is the whole point if you use it for tactical tilts rather than buy-and-forget.
• Clean mandate: chemicals, metals and mining, paper and forest products, containers and packaging, construction materials. No thematic drift.ssga.com

• 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

• XLB Around 26 stocks, and index rules let one name reach 25% at a quarter-end measurement. A couple of chemical giants carry outsized weight.sec.gov
• The universe is the S&P 500 only. Smaller miners and specialty producers sit outside the net, which is the water VAW and XME fish in.ssga.com
• One sector, tied to commodity prices and building demand, so it can travel a very different path from the broad market. Distributions come quarterly.ssga.com

• 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 XLB profile⁠

Full XME profile⁠