The materials sector covers companies involved in mining, forestry, chemicals, construction materials, and packaging. It plays a crucial role in the supply chain of almost every other industry.

Materials are cyclical, meaning they tend to perform well during economic growth and poorly during recessions when demand for raw goods declines.

It offers exposure to global economic trends, inflation hedging (e.g., metals), and growth tied to construction, manufacturing, and industrial output.

Fluctuating commodity prices, environmental regulations, and geopolitical instability can impact the performance of materials companies.