Designed to provide broad exposure to the Industrials - Broad segment of the equity market, the Industrial Select Sector SPDR ETF (XLI Quick QuoteXLI - Free Report) is a passively managed exchange traded fund launched on December 16, 1998.

Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.

Sector ETFs also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. 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 Investment Management. It has amassed assets over $23.44 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

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 0.08%, making it one of the least expensive products in the space.

It has a 12-month trailing dividend yield of 1.41%.

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, General Electric (GE) accounts for about 6.5% of total assets, followed by Rtx Corp (RTX) and Caterpillar Inc (CAT).

The top 10 holdings account for about 38.34% of total assets under management.

Performance and Risk

So far this year, XLI has added roughly 16.06%, and is up roughly 10.96% in the last one year (as of 10/14/2025). During this past 52-week period, the fund has traded between $116.42 and $155.59.

The ETF has a beta of 1.07 and standard deviation of 16.3% for the trailing three-year period, making it a medium risk choice in the space. With about 81 holdings, it effectively diversifies company-specific risk.

Alternatives

Industrial Select Sector SPDR ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, XLI is an outstanding 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 RBA American Industrial Renaissance ETF (AIRR) tracks Richard Bernstein Advisors American Industrial Renaissance Index and the Vanguard Industrials ETF (VIS) tracks MSCI US Investable Market Industrials 25/50 Index. First Trust RBA American Industrial Renaissance ETF has $5.67 billion in assets, Vanguard Industrials ETF has $6.23 billion. AIRR has an expense ratio of 0.7%, and VIS charges 0.09%.

Bottom Line

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