The Basic Materials sector is sensitive to changes in the business cycle. As demand for basic materials stems from the construction industry and companies requiring raw materials to then produce their final product, the supply of basic materials weighs heavily on a strong economy. In a growing, expanding economy, investment is made in infrastructure where the demand for basic materials is high. This drives the price of the raw materials up, which in turn increases the price of the companies held within this ETF, making the ETF overall a more valuable option.
The following gives a Selection of stocks from the Basic Material sector of the Standard&Poor 500 Top Companies (S&P500)