This invention provides a composite material useful for size reduction of electronic components and circuit boards mounted on electronic equipment and exhibiting a low magnetic loss (tan δ), and a manufacturing method thereof. The composite material contains an insulating material and particulates dispersed in this insulating material, the particulates being previously coated with an insulating material having substantially the same composition as that of the coating insulating material. The particulates consist of an organic or inorganic substance and preferably have a flat shape. The insulating material may be an insulating material commonly used in the field of electronic components. The composite material of the invention is preferably manufactured by a manufacturing method in which the particulates are previously coated with an insulating material and dispersed in an insulating material having substantially the same composition as that of the coating insulating material. The composite material of the invention can be applied as a material for circuit boards and/or electronic components to realize further reduction in size and power consumption of information and telecommunication equipment in a frequency band of several hundred MHz to 1 GHz.