4-Star ETFs Poised to Pop: Vanguard Materials

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Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, the Vanguard Materials ETF (NYS: VAW) has earned a respected four-star ranking.

With that in mind, let's take a closer look at Vanguard Materials and see what CAPS investors are saying about the ETF right now.

Vanguard Materials facts

InceptionJanuary 2004
Total Assets$542 million
Investment ApproachSeeks to replicate the MSCI US Investable Market Materials 25/50 Index, which consists of all capitalization of stocks within the materials sector.
Expense Ratio0.24%
Dividend Yield2.4%
1-Year / 3-Year / 5-Year Annual Returns(9.2%) / 18.7% / 2.3%
Top Holdings with High CAPS Rating (4 or 5 Stars) and Portfolio WeightDuPont (NYS: DD) (7.7%)
Monsanto (NYS: MON) (6.6%)
Newmont Mining (NYS: NEM) (6.4%)
AlternativesiShares Dow Jones U.S. Basic Materials (NYS: IYM)
SPDR S&P International Materials Sector (NYS: IRV)

Sources: Morningstar and Motley Fool CAPS.

On CAPS, 96% of the 92 members who have rated Vanguard Materials believe the ETF will outperform the S&P 500 going forward. These bulls include All-Star XMFScottD, who is ranked in the top 5% of our community, and johnw106.

Having gotten on board a couple of years ago, XMFScottD succinctly summed up the opportunity: "[Vanguard Materials] is a commodity play with Vanguard's typical low fees."

In fact, Vanguard Materials sports a cheapish expense ratio of 0.24%. That's lower than that of other material ETFs peers like iShares Dow Jones U.S. Basic Materials (0.47%) and SPDR S&P International Materials Sector (0.50%).

CAPS member johnw2106 expands on the opportunity:

This one is a way to own metals and fertilizers along with chemicals. As with my other ETF's I can own twenty or more of the top companies in this sector without having to buy twenty different stocks and paying a small fortune in commissions and fees. As the World economy recovers and begins to grow again look for a nice profit with this one.

What do you think about Vanguard Materials, or any other ETF for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional ETFs is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!

Want to see how well (or not so well) the stocks in this series are performing? Follow the newTrackPoisedToCAPS account.

At the time this article was published Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Motley Fool newsletter services have recommended creating a synthetic long position in Monsanto. Try any of our Foolish newsletter services free for 30 days.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.

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