Designed to provide broad exposure to the Industrials - Broad segment of the equity market, the iShares U.S. Industrials ETF (
IYJ Quick Quote IYJ - Free Report) is a passively managed exchange traded fund launched on 06/12/2000.
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
Additionally, sector ETFs offer convenient ways 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 9, placing it in bottom 44%.
The fund is sponsored by Blackrock. It has amassed assets over $1.09 billion, making it one of the larger ETFs attempting to match the performance of the Industrials - Broad segment of the equity market. IYJ seeks to match the performance of the Dow Jones U.S. Industrials Index before fees and expenses.
The Russell 1000 Industrials 40 Act 15/22.5 Daily Capped Index measures the performance of the industrial sector of the U.S. equity market. It includes: construction & materials, aerospace & defense, general industrials, electronic & electrical equipment, industrial engineering, industrial transportation & support services. The Index is capitalization-weighted.
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for this ETF are 0.41%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Industrials sector--about 58.60% of the portfolio. Information Technology and Materials round out the top three.
Looking at individual holdings, Visa Inc Class A (
V Quick Quote V - Free Report) accounts for about 7.41% of total assets, followed by Mastercard Inc Class A ( MA Quick Quote MA - Free Report) and Accenture Plc Class A ( ACN Quick Quote ACN - Free Report) .
The top 10 holdings account for about 35.83% of total assets under management.
Performance and Risk
So far this year, IYJ has lost about -17.04%, and is down about -18.07% in the last one year (as of 09/07/2022). During this past 52-week period, the fund has traded between $86.15 and $114.29.
The ETF has a beta of 1.13 and standard deviation of 26.58% for the trailing three-year period, making it a medium risk choice in the space. With about 183 holdings, it effectively diversifies company-specific risk.
IShares U.S. Industrials 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, IYJ 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.
Vanguard Industrials ETF (
VIS Quick Quote VIS - Free Report) tracks MSCI US Investable Market Industrials 25/50 Index and the Industrial Select Sector SPDR ETF ( XLI Quick Quote XLI - Free Report) tracks Industrial Select Sector Index. Vanguard Industrials ETF has $3.45 billion in assets, Industrial Select Sector SPDR ETF has $12.88 billion. VIS has an expense ratio of 0.10% and XLI charges 0.10%. Bottom Line
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Zacks ETF Center.