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Should You Invest in the Industrial Select Sector SPDR ETF (XLI)?
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The Industrial Select Sector SPDR ETF (XLI - Free Report) was launched on 12/16/1998, and is a passively managed exchange traded fund designed to offer broad exposure to the Industrials - Broad segment of the equity market.
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
Investor-friendly, sector ETFs provide many options to gain low risk and diversified exposure to a broad group of companies in particular sectors. Industrials - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 3, placing it in top 19%.
Index Details
The fund is sponsored by State Street Global Advisors. It has amassed assets over $17.78 billion, making it the largest ETF attempting to match the performance of the Industrials - Broad segment of the equity market. XLI seeks to match the performance of the Industrial Select Sector Index before fees and expenses.
The Industrial Select Sector Index includes companies from the following industries: industrial conglomerates; aerospace & defense; machinery; air freight & logistics; road & rail; commercial services & supplies; electrical equipment; construction & engineering; building products; airlines; and trading companies & distributors.
Costs
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.09%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.48%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Industrials sector--about 100% of the portfolio.
Looking at individual holdings, Union Pacific Corp (UNP - Free Report) accounts for about 4.40% of total assets, followed by Caterpillar Inc (CAT - Free Report) and Boeing Co/the (BA - Free Report) .
The top 10 holdings account for about 37.05% of total assets under management.
Performance and Risk
So far this year, XLI has gained about 9.07%, and is up about 29.80% in the last one year (as of 03/27/2024). During this past 52-week period, the fund has traded between $96.44 and $125.64.
The ETF has a beta of 1.09 and standard deviation of 17.13% for the trailing three-year period, making it a medium risk choice in the space. With about 80 holdings, it effectively diversifies company-specific risk.
Alternatives
Industrial Select Sector SPDR ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, XLI is an excellent option for investors seeking exposure to the Industrials ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
First Trust Industrials/Producer Durables AlphaDEX ETF (FXR - Free Report) tracks StrataQuant Industrials Index and the Vanguard Industrials ETF (VIS - Free Report) tracks MSCI US Investable Market Industrials 25/50 Index. First Trust Industrials/Producer Durables AlphaDEX ETF has $1.94 billion in assets, Vanguard Industrials ETF has $5.14 billion. FXR has an expense ratio of 0.61% and VIS charges 0.10%.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Should You Invest in the Industrial Select Sector SPDR ETF (XLI)?
The Industrial Select Sector SPDR ETF (XLI - Free Report) was launched on 12/16/1998, and is a passively managed exchange traded fund designed to offer broad exposure to the Industrials - Broad segment of the equity market.
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
Investor-friendly, sector ETFs provide many options to gain low risk and diversified exposure to a broad group of companies in particular sectors. Industrials - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 3, placing it in top 19%.
Index Details
The fund is sponsored by State Street Global Advisors. It has amassed assets over $17.78 billion, making it the largest ETF attempting to match the performance of the Industrials - Broad segment of the equity market. XLI seeks to match the performance of the Industrial Select Sector Index before fees and expenses.
The Industrial Select Sector Index includes companies from the following industries: industrial conglomerates; aerospace & defense; machinery; air freight & logistics; road & rail; commercial services & supplies; electrical equipment; construction & engineering; building products; airlines; and trading companies & distributors.
Costs
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.09%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.48%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Industrials sector--about 100% of the portfolio.
Looking at individual holdings, Union Pacific Corp (UNP - Free Report) accounts for about 4.40% of total assets, followed by Caterpillar Inc (CAT - Free Report) and Boeing Co/the (BA - Free Report) .
The top 10 holdings account for about 37.05% of total assets under management.
Performance and Risk
So far this year, XLI has gained about 9.07%, and is up about 29.80% in the last one year (as of 03/27/2024). During this past 52-week period, the fund has traded between $96.44 and $125.64.
The ETF has a beta of 1.09 and standard deviation of 17.13% for the trailing three-year period, making it a medium risk choice in the space. With about 80 holdings, it effectively diversifies company-specific risk.
Alternatives
Industrial Select Sector SPDR ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, XLI is an excellent option for investors seeking exposure to the Industrials ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
First Trust Industrials/Producer Durables AlphaDEX ETF (FXR - Free Report) tracks StrataQuant Industrials Index and the Vanguard Industrials ETF (VIS - Free Report) tracks MSCI US Investable Market Industrials 25/50 Index. First Trust Industrials/Producer Durables AlphaDEX ETF has $1.94 billion in assets, Vanguard Industrials ETF has $5.14 billion. FXR has an expense ratio of 0.61% and VIS charges 0.10%.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.