Vanguard Materials ETF

Vanguard Materials ETF (VAW) is an index fund that tracks the MSCI US Investable Market Index (IMI)/Materials 25/50. It held 110 US materials stocks of all sizes as of August 31, 2026, spanning chemicals, mining, steel, construction materials and packaging. Its 0.09% expense ratio is well below the 0.37% average of similar funds. It is also concentrated: Linde alone made up 14.6% of assets as of August 31, 2026.

• Over the year to Oct 27, 2026, VAW returned +13.9%, 7th of 9 among similar funds.
• Its 5-year annualized return was +6.0%.
• Its worst full calendar year was 2022 (-11.8%); its best was 2021 (+27.4%).
• The deepest fall in its price history was 25.5% (Apr 20, 2022 to Sep 26, 2022), recovered by Feb 29, 2024.

As of Aug 31, 2026, the fund held 110 securities; the ten largest made up 57.78% of assets.

By sector

• Over the three months to Aug 31, 2026, investors withdrew a net $43.0M (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: -1.23%, -2.61%, +6.00%.

VAW is the exchange-traded share class of Vanguard Materials Index Fund. It aims to track the MSCI US Investable Market Index (IMI)/Materials 25/50. That index covers large, mid-size and small US companies in the materials sector, as defined by the Global Industry Classification Standard (GICS), a widely used system for sorting companies by industry. The sector includes chemicals, construction materials, glass, paper, forest products and packaging, plus metals, mining and steel companies.

The fund uses replication. It tries to hold all, or nearly all, of the index's stocks in roughly the same proportions as the index, and it must keep at least 80% of net assets in those stocks. Larger companies get larger weights. The "25/50" in the index name refers to caps that limit how much the biggest companies can weigh. Even so, the fund is classed as nondiversified, which means a few stocks can drive results. As of August 31, 2026, Linde was 14.6% of assets, Newmont 8.8% and Freeport-McMoRan 7.0%, and the top 10 holdings together made up about 58%.

Trading inside the fund is light, with portfolio turnover of 7% in the prospectus. The fund uses no leverage and no options. As of August 31, 2026, it held about 0.47% in cash and one tiny swap position on Air Products that was a negligible share of assets. ETF shares trade on NYSE Arca at market prices, which can differ slightly from the value of the fund's holdings.

• VAW charges 0.09% a year, versus an average of 0.37% for the similar funds below (3rd of 9, cheapest first).
• Of that, 0.08% is the management fee; the rest covers other fund expenses.
• Using the prospectus's standard example, $10,000 invested would cost about $9 in the first year and $115 over 10 years (assuming a 5% annual return).

It is a single-sector, nondiversified stock fund that swings with commodity prices, so it fits better as a small add-on next to a broad core holding than as the core itself.

VAW adds exposure to chemical, mining, steel and building-materials companies, whose fortunes follow commodity prices and industrial demand. The price for that exposure is bumpy returns. In the 2022 bear market, it fell 25.5% between April 20 and September 26, 2022, and took about 17 months to get back to its peak, which it reached on February 29, 2024. The prospectus shows a 27.97% drop in the quarter that ended March 31, 2020, and a 17.37% loss for 2018. The figures here don't cover 2008. Anyone who has to sell shares during a stretch like that would lock in losses. Income is modest: a 1.4% trailing yield as of October 27, 2026, paid quarterly. Costs are low. In the SEC's standard example, $10,000 invested comes to $115 in costs over 10 years. Past results don't predict future ones, and a plan should look at the whole portfolio, not one fund.

Matched by holdings overlap from the latest N-PORT reports.