Looking for broad exposure to the Industrials - Broad segment of the equity market? You should consider the State Street Industrial Select Sector SPDR ETF (XLI), 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 are also funds of convenience, offering many 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%.
Index Details
The fund is sponsored by State Street Investment Management. It has amassed assets over $30.17 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.
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 1.14%.
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, Caterpillar Inc (CAT) accounts for about 7% of total assets, followed by General Electric (GE) and Ge Vernova Inc (GEV).The top 10 holdings account for about 39.35% of total assets under management.
Performance and Risk
The ETF has added roughly 7% and it's up approximately 7.57% so far this year and in the past one year (as of 10/26/2026), respectively. XLI has traded between $147.83 and $186.51 during this last 52-week period.
The ETF has a beta of 0.98 and standard deviation of 16.37% for the trailing three-year period, making it a medium risk choice in the space. With about 86 holdings, it effectively diversifies company-specific risk.
Alternatives
State Street 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.
Vanguard Industrials Index Fund ETF Shares (VIS) tracks MSCI US Investable Market Industrials 25/50 Index and the First Trust RBA American Industrial Renaissance ETF (AIRR) tracks Richard Bernstein Advisors American Industrial Renaissance Index. Vanguard Industrials Index Fund ETF Shares has $7.90 billion in assets, First Trust RBA American Industrial Renaissance ETF has $8.25 billion. VIS has an expense ratio of 0.09%, and AIRR charges 0.69%.
Bottom Line
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.
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State Street Industrial Select Sector SPDR ETF (XLI): ETF Research Reports
This article originally published on Zacks Investment Research (zacks.com).