The nation's focus on renewing its infrastructure, including railroads, aviation, and heavy machinery, has spurred a surge in demand for industrial space and has consequently been a catalyst for job creation in these sectors.
As the country invests in revamping its infrastructure, the industrial sector represents an exciting opportunity, with sectors such as aerospace and defense, construction and engineering, and electrical equipment leading the charge.
An exchange-traded fund (ETF) such as the Industrials Select Sector SPDR Fund (XLI) offers an accessible method of gaining exposure to this burgeoning industrial sector, a potential component of any diversified portfolio.
The Industrials Select Sector SPDR Fund (XLI) consists of 75 U.S. stocks* representing key subsectors that fuel the U.S. economy.
XLI tracks a market cap-weighted index of industrial-sector stocks drawn from the S&P 500, holds over $14 billion in assets under management, and has a 0.10%** annual expense ratio, making it one of the most efficient and most tradeable ways to gain access to this important sector.
The top 10 holdings for XLI are:
Caterpillar Inc. (4.67%)
Union Pacific Corp. (4.23%)
Honeywell International Inc. (4.17%)
General Electric Co. (4.09%)
Boeing Co. (3.82%)
United Parcel Service, Inc. Class B (3.78%)
Deere & Co. (3.61%)
Raytheon Technologies Corp. (3.60%)
Automatic Data Processing (3.29%)
Lockheed Martin Corp. (3.11%)
Caterpillar, Union Pacific, Honeywell, General Electric and Boeing are dominant by market capitalization in this sector. Aerospace and defense, building products, construction and engineering, electrical equipment, conglomerates, machinery, commercial services and supplies, air freight and logistics, airlines, marine, road, and rail are all represented by XLI.
XLI is employed by investors ranging from institutional, broker-dealers, financial advisors, and individuals to open the door to this important diversification vehicle, packed in the efficient and low-cost ETF wrapper.
The foundation of any economy lies in the manufacturing of goods and their distribution to businesses and consumers. XLI provides investors with access to this fundamental process that is vital to the daily operations of commerce, retail, and services.
Understanding the significance of each of the core 11 sectors of Select Sector SPDR ETFs is crucial when building a diversified portfolio, as it aids investors in their journey towards meeting their investment goals. For investors of all sizes, XLI can serve as an excellent entry point to consider.
DISCLAIMER: This is a work of research and should not be taken as investment or financial advice. Therefore, Select Sector SPDRs or the publisher is not liable for any decision made based on the publication.
About the Company:
Select Sector SPDR ETFs offer flexibility and customization opportunities. Many investors have similar outlooks, but no two are exactly alike. Select Sector SPDR ETFs let investors select the sectors that best meet their investment goals.
* Holdings, Weightings & Assets as of 9/15/23 subject to change
** Ordinary brokerage fees apply
The S&P 500 Index is an unmanaged index of 500 common stocks that is generally considered representative of the U.S. stock market. The index is heavily weighted toward stocks with large market capitalizations and represents approximately two-thirds of the total market value of all domestic common stocks. The S&P 500 Index figures do not reflect any fees, expenses or taxes. An investor should consider investment objectives, risks, fees and expenses before investing.
One may not invest directly in an index.
Transparent ETFs provide daily disclosure of portfolio holdings and weightings
All ETFs are subject to risk, including loss of principal. Sector ETF products are also subject to sector risk and nondiversification risk, which generally will result in greater price fluctuations than the overall market. Diversification does not eliminate risk.
An investor should consider investment objectives, risks, charges and expenses carefully before investing. To obtain a prospectus, which contains this and other information, call 1-866-SECTOR-ETF (732-8673) or visit www.sectorspdrs.com. Read the prospectus carefully before investing.
ALPS Portfolio Solutions Distributor, Inc., a registered broker-dealer, is distributor for the Select Sector SPDR Trust.
Company: Select Sector SPDRs
Contact: Dan Dolan*
Address: 1290 Broadway, Suite 1000, Denver, CO 80203
Country: United States
*Dan Dolan is a Registered Representative of ALPS Portfolio Solutions Distributor, Inc. ALPS Portfolio Solutions Distributor, Inc., a registered broker-dealer, is the distributor for the Select Sector SPDR Trust.
SEL006898 EXP 11/30/23