State Street Materials Select Sector SPDR ETF

XLB

Market cap $6B

FSDPX, FKRCX and ACGGX stand out as materials funds as cyclical tailwinds, pricing power and commodity demand point to a stronger 2026.

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The Investment Committee reveals the stocks they're watching as the market sets up for its next move.

If you're interested in broad exposure to the Materials - Broad segment of the equity market, look no further than the State Street Materials Select Sector SPDR ETF (XLB), a passively managed exchange traded fund launched on December 16, 1998.

This article presents a diversified, fund-based portfolio targeting market-matching growth and a 6%+ income yield, with lower tech exposure than the S&P 500. The model portfolio, comprising 5 ETFs and 6 CEFs, emphasizes asset class diversification—spanning blue-chip dividends, tech, real estate, gold, materials, energy, and utilities. The portfolio presented uses ahands-off approach, and it is diversified among many asset classes to be able to withstand different economiccycles in the next 10 years.

With market tailwinds building and optimism returning, these top-ranked ETFs can help investors capture momentum safely.

State Street Investment Management (SSIM) has been the investment advisor for the Select Sector SPDR ETFs since 1998. It will now take over the distribution and marketing for these funds.

Materials Select Sector SPDR ETF continues to underperform the S&P 500, rising just 4% over the past year despite sector tailwinds. XLB maintains a decent valuation with a 16.9x P/E and attractive 1.48x PEG, but technical indicators and weak momentum limit upside potential. The ETF's high concentration in top holdings and cyclical mid-cap exposure add risk, especially if economic growth slows.

Matt Camuso, Head of ETF Solutions at BNY Investments, says there are $13 trillion of assets in ETFs. That's compared to $5 trillion a year prior.

The stock market is historically expensive. Even as a recession is more and more plausible in the near future. Fortunately, many defensive dividend payers remain opportunistic.