Basic Materials Sector

What is the 'Basic Materials Sector'

The basic materials sector is a category of stocks that accounts for companies involved with the discovery, development and processing of raw materials. The basic materials sector includes the mining and refining of metals, chemical producers and forestry products.

BREAKING DOWN 'Basic Materials Sector'

The basic materials sector is sensitive to changes in the business cycle. Because the sector supplies materials for construction, it depends on a strong economy. This sector is also sensitive to supply and demand fluctuations because the price of raw materials, such as gold or other metals, is largely demand driven.

RELATED TERMS
  1. Raw Materials

    A material or substance used in the primary production or manufacturing ...
  2. Value Chain

    A high-level model of how businesses receive raw materials as ...
  3. Sector

    1. An area of the economy in which businesses share the same ...
  4. Material News

    News released by a company that might affect the value of its ...
  5. Chemicals Industry ETF

    An exchange-traded fund that invests in manufacturers of chemicals. ...
  6. Material Weakness

    When one or more of a company's internal controls, put in place ...
Related Articles
  1. Economics

    How Does a Company Use Raw Materials?

    Raw materials are the basic components of a finished product.
  2. Mutual Funds & ETFs

    The 3 Largest Materials ETFs (XLB, VAW)

    Find out which three exchange-traded funds (ETFs) are the largest in the basic materials sector, and how they are performing year-to-date in 2016.
  3. Investing News

    Materials Sector: Industries Snapshot (DOW, DD)

    Explore the chemicals, packaging, construction materials and mining industries. See which factors are driving growth in each industry of the materials sector.
  4. Mutual Funds & ETFs

    The Top 5 Materials Equity Mutual Funds for 2016

    Read about five mutual funds covering the basic materials sector that could be excellent buys after a catastrophic 2015 for the category.
  5. Sectors

    The Debt Report: The Materials Sector

    Find out why the U.S. materials sector has accumulated more and more debt each year between 2011 and 2015, outstripping valuation gains.
  6. Mutual Funds & ETFs

    The Top 5 Materials ETFs for 2016

    Read about five of the best materials exchange-traded funds available for 2016, and learn how you can get the exposure you need in this sector.
  7. Mutual Funds & ETFs

    5 Popular Materials ETFs in 2016 (GDX, XLB)

    Learn how the five most popular materials ETFs for 2016 can provide exposure to large-cap materials companies, homebuilders and mining companies of all sizes.
  8. Stock Analysis

    The Top 5 Small-Cap Basic Material Stocks for 2016 (WOR, CMC)

    Find out what kind of small-cap basic material stocks may make a run in 2016 and how their different business characteristics have played into the selection.
  9. Term

    What's a Sector?

    The term sector has several applications in economics and finance.
  10. Mutual Funds & ETFs

    IYM: iShares US Basic Materials ETF

    Learn about the iShares US Basic Materials exchange-traded fund, which invests in the equities of chemicals, metals and industrial gas companies.
RELATED FAQS
  1. On which financial statement does a company list its raw material costs?

    Discover what items are raw materials, how raw material costs affect businesses, and where these costs are recorded on a ... Read Answer >>
  2. What commodities are the main inputs for the electronics sector?

    Explore the use of commodities in the electronics sector. Discover potential risks and opportunities presented by raw materials ... Read Answer >>
  3. To what extent do changing input prices affect the profitability of the chemicals ...

    Explore the chemicals sector and how commodities and raw materials price volatility impacts the profitability of chemicals ... Read Answer >>
  4. Does a company logo change require a material disclosable event?

    A company logo change usually constitutes a material disclosable event. Securities law requires that companies disclose all ... Read Answer >>
  5. What are the major types of insurance policies that insurance companies will offer?

    Explore one of the largest market sectors, the chemicals sector, and learn which primary basic commodities are used in producing ... Read Answer >>
  6. What methods can an investor use to get leveraged exposure to the chemicals sector?

    Learn the methods an investor can use to gain exposure to the chemicals sector. The chemicals sector is an important indicator ... Read Answer >>
Hot Definitions
  1. Law Of Demand

    A microeconomic law that states that, all other factors being equal, as the price of a good or service increases, consumer ...
  2. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  3. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  4. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  5. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  6. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
Trading Center