The IYM ETF, also known as the Intelligent Machines ETF, is an exchange-traded fund that focuses on companies involved in the development, production, design, and maintenance of products and services related to intelligent machines and technological innovation.

What is the investment theme of the IYM ETF?

The investment theme of the IYM ETF revolves around intelligent machines, which includes companies expected to substantially benefit from technology-driven transformations in product design, manufacture, logistics, distribution, and maintenance, including developments in artificial intelligence.

What types of companies are included in the IYM ETF?

The IYM ETF includes companies from various sectors that are substantially focused on intelligent machines and related technologies. This includes companies involved in developing new capabilities, systems, software, products, and services based on physical applications of new technologies.

How does the IYM ETF operate?

The IYM ETF aims to track the performance of companies relevant to the investment theme of intelligent machines. It invests at least 80% of its net assets in equity securities of such companies, predominantly in common stock.

What are the advantages of investing in the IYM ETF?

Investing in the IYM ETF provides exposure to companies at the forefront of technological evolution and innovation. It offers diversification across sectors, including a significant presence in technology, and allows investors to potentially benefit from the ongoing advancements in intelligent machines and related industries.

5 min read

By Ron Koren, ETF Insider

What is the IYM ETF ?

In the ever-changing world of finance, Exchange-Traded Funds (ETFs) have become increasingly popular among investors due to their flexibility and diversification benefits. One such ETF that has gained attention is the iShares U.S. Basic Materials ETF (IYM). In this article, we will delve into the various aspects of the IYM ETF to provide you with a comprehensive understanding of its underlying index, benefits, considerations, and more.

IYM ETF: Overview

The iShares U.S. Basic Materials ETF (IYM) is an investment fund offered by BlackRock Fund Advisors (BFA). Its primary objective is to track the investment results of the Russell 1000 Basic Materials RIC 22.5/45 Capped Index, commonly referred to as the "Underlying Index." This index measures the performance of the basic materials sector within the U.S. equity market, comprising large- and mid-capitalization companies.

IYM ETF Underlying and Exposure: What does it track and how?

The Underlying Index, a subset of the broader Russell 1000 Index, follows a float-adjusted capitalization-weighted methodology. It includes equity securities issued by approximately the 1,000 largest issuers in the Russell 3000 Index, representing the broad U.S. equity market. The capping methodology applied during quarterly rebalances ensures that no single issuer exceeds a weight of 22.5%, and the aggregate weight of issuers with more than 4.5% individual weight does not exceed 45%.
The IYM ETF employs a passive or indexing approach, meaning it aims to replicate the performance of the Underlying Index rather than trying to outperform it actively. By adopting a representative sampling indexing strategy, the fund invests in a sample of securities that collectively mirrors the investment profile of the Underlying Index. This approach not only reduces the risks associated with active management but also helps in achieving lower costs and better after-tax performance.

IYM overlap What is the IYM ETF ?

IYM ETF: Benefits of Investing

Investing in the IYM ETF offers several benefits. First and foremost, it provides exposure to the basic materials sector, which encompasses companies involved in industries like chemicals, metals, mining, construction materials, and more. This sector plays a crucial role in the economy, making the ETF attractive to investors seeking to capitalize on the growth potential of these industries.
Furthermore, the ETF's passive approach ensures lower expenses compared to actively managed funds. The diversification provided by the IYM ETF helps spread risk across various companies within the sector, reducing the impact of individual stock performance on the overall investment.

IYM ETF: Considerations before Investing

While the IYM ETF offers compelling benefits, potential investors should consider a few key factors before making a decision. As with any investment, it is essential to evaluate your risk tolerance and investment goals. The basic materials sector can be sensitive to economic fluctuations and market cycles, which may affect the ETF's performance.
Additionally, investors should research the ETF's historical performance, expense ratio, and trading volume to ensure it aligns with their investment strategy. Diversification across sectors and asset classes remains crucial to achieve a balanced portfolio, and the IYM ETF should be viewed as one element of a broader investment approach.

Conclusion:

In conclusion, the iShares U.S. Basic Materials ETF (IYM) provides investors with exposure to the dynamic basic materials sector of the U.S. equity market. By tracking the Russell 1000 Basic Materials RIC 22.5/45 Capped Index, the ETF offers a convenient way to access this sector's growth potential while diversifying risk. However, as with any investment, thorough research and careful consideration of personal financial goals are essential.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. The author is not providing any investment advisory services. Investors are encouraged to conduct their own research and consult with a qualified financial advisor before making investment decisions.

IYM ETF issuer
IYM ETF official page

IYM quote and analysis

Discover the top holdings, correlations, and overlaps of ETFs using our visualization tool.
Our app allows you to build and track your portfolio.
To learn more about the IYM iShares U.S. Basic Materials ETF, access our dedicated page now.

Get started

FAQ

What is the IYM ETF?
The IYM ETF, also known as the Intelligent Machines ETF, is an exchange-traded fund that focuses on companies involved in the development, production, design, and maintenance of products and services related to intelligent machines and technological innovation.
What is the investment theme of the IYM ETF?
The investment theme of the IYM ETF revolves around intelligent machines, which includes companies expected to substantially benefit from technology-driven transformations in product design, manufacture, logistics, distribution, and maintenance, including developments in artificial intelligence.
What types of companies are included in the IYM ETF?
The IYM ETF includes companies from various sectors that are substantially focused on intelligent machines and related technologies. This includes companies involved in developing new capabilities, systems, software, products, and services based on physical applications of new technologies.
How does the IYM ETF operate?
The IYM ETF aims to track the performance of companies relevant to the investment theme of intelligent machines. It invests at least 80% of its net assets in equity securities of such companies, predominantly in common stock.
What are the advantages of investing in the IYM ETF?
Investing in the IYM ETF provides exposure to companies at the forefront of technological evolution and innovation. It offers diversification across sectors, including a significant presence in technology, and allows investors to potentially benefit from the ongoing advancements in intelligent machines and related industries.