|
|
|
Published: September 21, 2004
The Materials Select Sector
SPDR (XLB) is an exchange-traded fund (ETF) that is designed to track the S&P Materials Sector Index.
That index is comprised of 33 companies whose shares account for about
3% of the total value of the S&P 500. Many well-known names
are included in this somewhat concentrated SPDR. The fund's largest holding,
DuPont (DD), accounts for 13.5% of the fund's value. Meanwhile, Dow Chemical
(DOW) makes up another 12.1%. The top 10 stocks account for nearly two-thirds of the fund's net asset value.
Firms in the materials sector provide many of the raw materials used
throughout the manufacturing process, including paper, chemical and gas products. Because these are inputs for
other industries, materials firms generally outperform the broader market during the early part of an
economic recovery. On the downside, of course, materials-oriented companies
also tend to peak sooner than the rest of the market.
When firms in this sector start
to show weak earnings, it is often a signal of a
weakening economy. Raw materials prices tend to be more volatile than
final products prices. When these firms cannot pass on increased costs to
their customers, it is usually a sign of weakening demand (and also of
lower inflationary pressures ahead).
XLB shows a moderately high correlation to the S&P
500 and an even higher correlation with the Dow Jones Industrial Average. The
fund's correlation is 87% with the Dow, but only about 82% with
the S&P 500. The S&P 500 holds many technology oriented issues,
which do not track the materials sector closely at all. This is also
evidenced by a low correlation with the Nasdaq Composite.
| Materials
SPDR (XLB) |
|
|
|
| Type: |
Sector |
|
|
|
|
| Similar
funds: |
Industrial SPDR (XLI) |
|
|
|
|
|
|
|
|
| Options?: |
Yes, illiquid |
|
|
|
|
|
|
|
|
|
|
| Performance
Data |
|
|
|
|
| 52-week
High: |
$27.31 |
3/1/2004 |
|
Annualized
return since: |
| 52-week
Low: |
$21.70 |
9/30/2003 |
|
One-year |
16.45% |
| YTD
Return: |
0.48% |
(as of
9/17/2004) |
Three-year |
13.52% |
|
|
|
|
Five-year |
3.45% |
| Dividends: |
$0.45 |
past
12-mos |
Life of fund* |
5.61% |
| Expense
Ratio: |
0.28% |
|
|
*
- Started trading 12/22/1998 |
|
|
|
|
|
|
| Correlation
Data* |
(1/02/02-8/31/04) |
Holdings* |
(as of 9/9/2004) |
| Dow
Jones Industrials |
87.0% |
|
DuPont (DD) |
13.49% |
| S&P
500 |
|
81.9% |
|
Dow Chemicals (DOW) |
12.63% |
| Nasdaq
Composite |
74.2% |
|
Alcoa (AAA) |
9.10% |
| Nasdaq-100 |
|
70.6% |
|
International Paper (IP) |
6.14% |
|
|
|
|
Newmont Mining (NEM) |
5.10% |
| XLI |
|
82.0% |
|
Weyerhauser (WY) |
4.66% |
|
|
|
|
Praxair (PX) |
4.26% |
|
|
|
|
Air Products&Chem (APD) |
3.88% |
|
|
|
|
PPG Industries (PPG) |
3.27% |
|
|
|
|
Monsanto (MON) |
3.13% |
|
|
|
|
* Percent top ten are of total |
65.66% |
|
|
|
|
|
|
| Average
Daily Volume |
|
Average
Daily Price Range |
| Aug-04 |
917,745 |
|
|
Aug-04 |
1.5% |
| 2004 YTD |
1,116,907 |
|
|
2004 YTD |
1.6% |
| 2003 |
466,244 |
|
|
2003 |
1.6% |
| *
- Correlation measures how closely the two items track each
other |
|
*
Includes prior day's close (true range) |
HOW TO MAKE MONEY IN XLB THIS YEAR
XLB continues to trace out a bullish ascending triangle. Although a
small dip is possible in the immediate term, look for range trading
between $27.50 and $25.50 for the next several months before the fund
ultimately breaks out higher to target $29-$31.
|
|
11
Surprising Investment Predictions for 2009
A wind-powered car . . .
oil at $160 per barrel . . . a +200% to +300% rebound in shipping
stocks... a war fought over water . . . these are just a few of the
startling predictions that StreetAuthority
Market Advisor has just revealed for 2009. Each of these
developments will trigger explosive profits for investors in the coming
year. Click
here to see our full range of forecasts.
Income Security
of the Month -- January 2009
If you're looking for
high yields, monthly payments and unprecedented safety, then you need to learn more about our "Income
Security of the Month" for January 2009. This stable
preferred stock has a long
track record of paying some of the most dependable dividends in Wall
Street history. It pays a monthly dividend
totaling 9.9% annually
and has
outperformed the S&P 500 by more than +52% over the last
year.
|
The Top Stocks to Own Before
Obama Takes Office
Whenever
Washington decides to help a new industry get off the
ground, the investment profits follow in lockstep.
And a small group of 20 to 30 stocks is going to be flooded
with so much new government cash that our research team
believes a few of them could shoot up 40-to-1 in the next three or four
years. This group of investments was a good bet even
before Obama was elected . . . now it's a slam dunk.
Wall
Street Meltdown Creates Highest Dividend Yields in a Decade
The recent Wall Street crisis has created a once-in-a-lifetime
opportunity for investors like you to lock in high yields on safe, low-risk
stocks. Yields of 20.2% . . . 22.4% . . . even 33.1%!
Our new special report on the subject shows you SEVEN dividend superstars
that can help you rebuild your portfolio. Click
here to get your free copy of the report. |
|
6
Free Months of Bernie Schaeffer's Option Advisor
Learn the secrets of successful options trading from top trader,
Bernie Schaeffer. Start your free 6-month subscription to The Option
Advisor newsletter now and get free online access to Bernie's Crash
Course in Top Gun Trading Techniques.
3
Penny Stocks Poised to Soar 300%
By the time Wall Street notices the 3 picks revealed in this report,
you could be sitting on a fortune. Click
here to get immediate access to an exclusive Free report --
"3 Underground Penny Stocks Poised to Soar."
|
Investor's
Business Daily (IBD)
Get 10 Free Issues of Investor's Business Daily (IBD) – Plus 2
Free Weeks of Investors.com
Capture
22.8% Yields and +701.8% Gains with ETFs
Join exchange-traded fund (ETF) expert Nathan Slaughter's
"V.I.P. List" and get these three members-only benefits
for free --> 1.) Free ETF report revealing the 3 best ways to
profit from ETFs right now, 2.) Free 9-lesson course showing you how
to pick winning ETFs, 3.) Specific details on Nathan's favorite
individual ETFs for today's market.
|
|
|
|
|
|
