Industrial Sector ETFs

Nov 30, 2023 By Triston Martin

When it comes to targeting a certain industry, sector ETFs are an excellent approach to acquiring rapid exposure without the need to corner the market in relevant companies or fight the price of an index basket. Therefore, if you want to focus your investment strategy on the industrial sector, an industrial exchange-traded fund (ETF) can be an excellent addition to your portfolio.

Companies that are active in sectors such as engineering, heavy machinery, components manufacture, construction, electrical equipment, aerospace and military, and general manufacturing are often included in the industrial sector. However, this category is not restricted to only these areas. The corporations may even be engaged in activities that span many industries, such as the provision of utilities or consumer discretionary goods.

Suppose you think this may be a good possibility for your portfolio. In that case, you should know that investing in exchange-traded funds (ETFs) provides you with a wide range of benefits, including low transaction costs, tax benefits, and exposure to various industries.

In addition, there is a sizable selection of exchange-traded funds (ETFs) available in the industrials sector, which includes inverse, leveraged, and international funds. There are now a few different industrial ETFs, and as soon as any more become accessible, I will update this list. Additionally, if any are delisted, I will also take them off the list. Therefore, keep coming back here. In the interim, I have compiled a list of the most recent industrial ETFs for you.

CHII – Global X MSCI China Industrials ETF

This China exchange-traded fund correlates with the Solactive China Industrials Index, and its holdings include companies such as Weichan Power Co. Ltd, Citic Ltd., and Conch Venture. Since November 2009, trading has taken place in CHII, which seeks to invest in firms based in China or that conduct most of their operations inside the nation.

IYJ – iShares US Industrial ETF

Exchange-traded fund is highly correlated with the Dow Jones U.S. Industrials Index and invests in relevant firms, such as General Electric, PayPal, and 3M. As of May 2021, the fund has 191 different stocks, and it was first established in June 2000. The iShares U.S. Industrials ETF (IYJ) has a relatively diversified sector split, as it invests in general industrials, aerospace, industrial engineering, support services, transportation, and electrical equipment.

PRN – Invesco DWA Industrials Momentum ETF

This fund focuses on the industrial sector and follows Dorsey Wright Industrials Index. Some firms it invests in include AMETEK, Old Dominion Freight Line, and Trane Technologies. The Invesco DWA Industrials Momentum ETF (PRN) is focused mostly on the industrial sector. However, it also has some holdings in the utility sector due to the nature of its underlying holdings.

PSCI – Invesco S&P SmallCap Industrials ETF

This small-cap exchange-traded fund tracks S&P SmallCap 600 Capped Industrials Index and is mostly invested in United States firms, including Saia, Watts Water Technologies, UFP Industries, and Allegiant Travel. The Invesco S&P SmallCap Industrials ETF (PSCI) does have some overlap with the Financials and Consumer Discretionary sectors, even though the Industrials sector is the primary one represented in the fund's holdings.

RGI – Invesco S&P 500 Equal Weight Industrials ETF

This fund follows the S&P 500 Equal Weight Industrials Index, and some of the firms it holds are Northup Grumman, United Parcel Service, and Equifax. Although the machinery sector is the most heavily represented in the Invesco S&P 500 Equal Weight Industrials ETF (RGI), the fund also has holdings in other industrial subsectors, including aerospace and military, commercial services and supplies, and electrical equipment.

SIJ – ProShares UltraShort Industrials ETF

This exchange-traded fund uses leverage and short positions to aim for an inversely proportional daily returns of twice that of Dow Jones Industrials Index. To accomplish its financial objectives, the SIJ invests in various assets, including cash and derivative financial instruments.

UXI – ProShares Ultra Industrials ETF

This fund, in contrast to the inverse fund described in the section above about SIJ, aims to achieve daily returns that are twice as high as those of Dow Jones Industrials Index. Union Pacific Corp, PayPal, Square, and Honeywell International are some companies that the ProShares Ultra Industrials ETF (UXI) has as holdings in its portfolio.

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