New ETF Hits Gold in Materials Sector

I was generally negative when I wrote about the materials-sector ETFs last year, as I thought they were too heavy in chemical companies and too light in mining stocks and yield. In addition, the funds owned U.S. stocks only, lacking vital international exposure.

My outlook has changed, mainly because iShares launched the iShares S&P Global Materials Index(MXI Quote) fund last week. After some examination, it appears that this is a way for investors to gain exposure to the materials sector without taking on the risk that comes with owning an individual stock.

Rectifying the international shortcoming, foreign stocks make up 76% of MXI's portfolio, with the U.K. (16%), Japan (12%) and Canada and Australia (9% each) holding the top international spots. U.S. companies weigh in at 24%. ...