Should You Invest in the Industrial Select Sector SPDR ETF (XLI)?
Looking for broad exposure to the Industrials - Broad segment of the equity market? You should consider the Industrial Select Sector SPDR ETF (XLI), a passively managed exchange traded fund launched on 12/16/1998.
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 10, placing it in bottom 38%.
The fund is sponsored by State Street Global Advisors. It has amassed assets over $21.17 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.
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 1.34%.
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 100% of the portfolio.
Looking at individual holdings, General Electric (GE) accounts for about 5.47% of total assets, followed by Uber Technologies Inc (UBER) and Rtx Corp (RTX).
The top 10 holdings account for about 36.25% of total assets under management.
Year-to-date, the Industrial Select Sector SPDR ETF return is roughly 9.73% so far, and was up about 19.06% over the last 12 months (as of 06/11/2025). XLI has traded between $116.42 and $144.93 in this past 52-week period.
The ETF has a beta of 1.07 and standard deviation of 17.68% 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.
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 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 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 $3.76 billion in assets, Vanguard Industrials ETF has $5.55 billion. AIRR has an expense ratio of 0.70% and VIS charges 0.09%.
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.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Industrial Select Sector SPDR ETF (XLI): ETF Research Reports
GE Aerospace (GE) : Free Stock Analysis Report
Vanguard Industrials ETF (VIS): ETF Research Reports
First Trust RBA American Industrial Renaissance ETF (AIRR): ETF Research Reports
Uber Technologies, Inc. (UBER) : Free Stock Analysis Report
RTX Corporation (RTX) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
a day ago
- Yahoo
Best Growth Stocks to Buy for June 20th
Here are three stocks with buy ranks and strong growth characteristics for investors to consider today, June 20th: BAE Systems plc BAESY: This company that provides defense, aerospace, and security solutionscarries a Zacks Rank #1, and has witnessed the Zacks Consensus Estimate for its current year earnings increasing 3.9% over the last 60 days. Bae Systems PLC price-consensus-chart | Bae Systems PLC Quote BAE has a PEG ratio of 1.95 compared with 3.47 for the industry. The company possesses a Growth Score of B. Bae Systems PLC peg-ratio-ttm | Bae Systems PLC Quote Intuit Inc. INTU: This financial management, compliance, and marketing products and services company carries a Zacks Rank #1, and has witnessed the Zacks Consensus Estimate for its current year earnings increasing 4.2% over the last 60 days. Intuit Inc. price-consensus-chart | Intuit Inc. Quote Intuit has a PEG ratio of 2.46 compared with 2.55 for the industry. The company possesses a Growth Score of A. Intuit Inc. peg-ratio-ttm | Intuit Inc. Quote Nova Ltd. NVMI: This process control systems company carries a Zacks Rank #1, and has witnessed the Zacks Consensus Estimate for its current year earnings increasing 2.1% over the last 60 days. Nova Ltd. price-consensus-chart | Nova Ltd. Quote Nova has a PEG ratio of 1.88 compared with 9.79 for the industry. The company possesses a Growth Score of B. Nova Ltd. peg-ratio-ttm | Nova Ltd. Quote See the full list of top ranked stocks here. Learn more about the Growth score and how it is calculated here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Intuit Inc. (INTU) : Free Stock Analysis Report Bae Systems PLC (BAESY) : Free Stock Analysis Report Nova Ltd. (NVMI) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
Yahoo
2 days ago
- Yahoo
Here's Why Sony (SONY) Fell More Than Broader Market
Sony (SONY) closed at $24.75 in the latest trading session, marking a -4.37% move from the prior day. This move lagged the S&P 500's daily loss of 0.22%. On the other hand, the Dow registered a gain of 0.08%, and the technology-centric Nasdaq decreased by 0.51%. The electronics and media company's shares have seen an increase of 2.17% over the last month, surpassing the Consumer Discretionary sector's loss of 0.1% and the S&P 500's gain of 0.45%. The investment community will be closely monitoring the performance of Sony in its forthcoming earnings report. On that day, Sony is projected to report earnings of $0.23 per share, which would represent a year-over-year decline of 4.17%. For the full year, the Zacks Consensus Estimates project earnings of $1.16 per share and a revenue of $79.87 billion, demonstrating changes of -5.69% and -6.09%, respectively, from the preceding year. It is also important to note the recent changes to analyst estimates for Sony. Such recent modifications usually signify the changing landscape of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the business outlook. Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system. The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 2.31% lower. Sony is currently a Zacks Rank #5 (Strong Sell). With respect to valuation, Sony is currently being traded at a Forward P/E ratio of 22.26. This signifies a discount in comparison to the average Forward P/E of 33.66 for its industry. Meanwhile, SONY's PEG ratio is currently 12.44. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. SONY's industry had an average PEG ratio of 12.44 as of yesterday's close. The Audio Video Production industry is part of the Consumer Discretionary sector. With its current Zacks Industry Rank of 193, this industry ranks in the bottom 22% of all industries, numbering over 250. The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1. Make sure to utilize to follow all of these stock-moving metrics, and more, in the coming trading sessions. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Sony Corporation (SONY) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
Yahoo
2 days ago
- Yahoo
Roku, Inc. (ROKU) Is a Trending Stock: Facts to Know Before Betting on It
Roku (ROKU) is one of the stocks most watched by visitors lately. So, it might be a good idea to review some of the factors that might affect the near-term performance of the stock. Over the past month, shares of this video streaming company have returned +16.7%, compared to the Zacks S&P 500 composite's +0.5% change. During this period, the Zacks Broadcast Radio and Television industry, which Roku falls in, has gained 2.6%. The key question now is: What could be the stock's future direction? Although media reports or rumors about a significant change in a company's business prospects usually cause its stock to trend and lead to an immediate price change, there are always certain fundamental factors that ultimately drive the buy-and-hold decision. Here at Zacks, we prioritize appraising the change in the projection of a company's future earnings over anything else. That's because we believe the present value of its future stream of earnings is what determines the fair value for its stock. Our analysis is essentially based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. When earnings estimates for a company go up, the fair value for its stock goes up as well. And when a stock's fair value is higher than its current market price, investors tend to buy the stock, resulting in its price moving upward. Because of this, empirical studies indicate a strong correlation between trends in earnings estimate revisions and short-term stock price movements. Roku is expected to post a loss of $0.15 per share for the current quarter, representing a year-over-year change of +37.5%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged. The consensus earnings estimate of -$0.17 for the current fiscal year indicates a year-over-year change of +80.9%. This estimate has remained unchanged over the last 30 days. For the next fiscal year, the consensus earnings estimate of $0.7 indicates a change of +515% from what Roku is expected to report a year ago. Over the past month, the estimate has remained unchanged. Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Roku is rated Zacks Rank #3 (Hold). The chart below shows the evolution of the company's forward 12-month consensus EPS estimate: Even though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial. In the case of Roku, the consensus sales estimate of $1.07 billion for the current quarter points to a year-over-year change of +10.6%. The $4.55 billion and $5.07 billion estimates for the current and next fiscal years indicate changes of +10.5% and +11.4%, respectively. Roku reported revenues of $1.02 billion in the last reported quarter, representing a year-over-year change of +15.8%. EPS of -$0.19 for the same period compares with -$0.35 a year ago. Compared to the Zacks Consensus Estimate of $1 billion, the reported revenues represent a surprise of +1.61%. The EPS surprise was +29.63%. The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates each time over this period. No investment decision can be efficient without considering a stock's valuation. Whether a stock's current price rightly reflects the intrinsic value of the underlying business and the company's growth prospects is an essential determinant of its future price performance. Comparing the current value of a company's valuation multiples, such as its price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), to its own historical values helps ascertain whether its stock is fairly valued, overvalued, or undervalued, whereas comparing the company relative to its peers on these parameters gives a good sense of how reasonable its stock price is. As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued. Roku is graded D on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade. The facts discussed here and much other information on might help determine whether or not it's worthwhile paying attention to the market buzz about Roku. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Roku, Inc. (ROKU) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Sign in to access your portfolio
