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Consider Putting Industrials Sector Fund to Work for You

Exchange-traded fund expert Doug Fabian looks at an ETF investment which focuses in the Industrials sector of the S&P 500.

The industrials sector contains some of the great workhorses of the U.S. economy. Containing about 10% of components on the S&P 500, the corresponding exchange-traded fund (ETF), Industrial Select Sector SPDR ETF (XLI), invests in large-cap companies in the Industrial Select Sector Index. This index covers areas such as aerospace and defense, machinery, airlines, construction and engineering.

Unlike the consumer discretionary sector featured last week, industrials do not fluctuate much with the rise and fall of consumer sentiment; rather, they are more closely attuned to trends both domestically and abroad.

View the current price, volume, performance and top 10 holdings of XLI at ETFU.com.

With a string of positive U.S. sessions in October and news of a strengthening global economy, XLI??s stock has risen more than 12% in a little over a month from its low in late September. The fund still is down about 3.5% year to date, but it could be in a good position if the global market continues to be solid. The dividend yield is a little over 2% and has increased in each quarter of 2015 so far. XLI also has more than $6.5 billion in assets managed, with an expense ratio of 0.15%.

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Due to the sector’s diversity, XLI??s top holdings represent several different fields. Combined, the top 10 holdings account for nearly 50% of the fund??s assets. The biggest holding by far is General Electric (GE), with 11.38% of total assets, more than double the weighting of other top companies. 3M (MMM), the adhesives company, has 5.3% of assets, followed by aerospace giant Boeing (BA) with 5.13%. Honeywell International (HON) and United Technologies (UTX) each hold 4.4%.

If an industrial fund featuring these classic American companies seems appealing to you, you may want to take a look at Industrial Select Sector SPDR ETF (XLI). In my next ETF Talk column, I plan to write about another sector for your consideration.

View the current price, volume, performance and top 10 holdings of XLI at ETFU.com.

If you want my advice about buying and selling specific ETFs, including appropriate stop losses, please consider subscribing to my Successful ETF Investing newsletter.

As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an e-mail. You just may see your question answered in a future ETF Talk.

In case you missed it, I encourage you to read my e-letter column from last week about a Consumer Discretionary fund that reflects the broader economy. I also invite you to comment in the space provided below my Eagle Daily Investor commentary.

Written By

Doug Fabian is the editor of Successful Investing and High Monthly Income, and is the host of the syndicated radio show, "Doug Fabian's Wealth Strategies." Taking over the reigns from his dad, Dick Fabian, back in 1992, Doug has continued to uphold the reputation of the newsletter as the #1 risk-adjusted market timer as ranked by Hulbert??s Investment Digest. For more than 30 years, Successful Investing (formerly the Telephone Switch Newsletter) has produced double-digit annual gains. Doug has become known for his expert knowledge and timely use of innovative tools like Exchange Traded Funds, bear funds and Enhanced Index funds to profit in any market climate.

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