MXI: Materials Dashboard For August

The materials sector is broadly overvalued versus 11-year averages, with mining/metals most overpriced but offset by excellent quality scores. The iShares Global Materials ETF offers global materials sector exposure with an overweight in mining/metals and less company-specific risk than the U.S.-focused XLB. MXI is slightly cheaper than XLB based on valuation ratios but exhibits inferior and even negative aggregate growth rates. Over the past 12 months, MXI outperformed XLB by 10.1%, mostly due to mining strength, despite lagging XLB since 2006 on total return and risk metrics. Five stocks are cheaper than their peers.

This article provides a top-down analysis of the materials sector based on industry metrics that focus on fundamentals and momentum. It may also help to analyze sector ETFs such as the Materials Select Sector SPDR ETF (