We have seen notable inflows as well in XLI, with more than $350 million entering the fund via creations in recent days, which is more than 10% of the assets outstanding in the ETF. Having a heavy weighting to GE (11.15% of the index), the top five holdings in XLI are as follows: GE (11.15%), UPS (5.59%), UTX (5.56%), CAT (5.21%), and MMM (4.50%).
GE is expected to release earnings later this week, prior to the market open on 4/20. Also, it is worth noting that UPS is also the third largest holding in the Dow Jones Transportation Average Index, with an 8.50% weighting currently.
In the Domestic U.S. Industrials space in terms of ETFs, there are a number of options available in addition to XLI, which tracks an S&P based sector index. Vanguard Industrials (NYSEArca: VIS - News) tracks an MSCI Industrials based index, while iShares Dow Jones U.S. Industrial Sector (NYSEArca: IYJ - News) tracks, as its name suggests, a Dow Jones index.
Guggenheim S&P 500 Equal Weighted Industrial (NYSEArca: RGI - News) tracks the same index as XLI, only the portfolio holdings are equal weighted and rebalanced on a monthly basis so as to keep them in line. XLI as one might expect, is a market capitalization weighted index calculated by a stock’s price multiplied by its shares outstanding, or “float.”
Two fundamentally weighted/quantitative approaches to the Industrials sector also exist, those being First Trust Industrials AlphaDEX (NYSEArca: FXR - News) and PowerShares Dynamic Industrials Sector (NYSEArca: PRN - News) .
In the trailing one year period, only one of the aforementioned funds has produced a positive return, and that is IYJ which is up 0.36%. XLI has lost 0.19% during this timeframe, followed by RGI (-0.78%), VIS (-0.98%), FXR (-1.94%), and PRN (-2.68%).
It is safe to say that in the trailing one year period, the market cap weighted approaches have trumped the fundamentally/quantitative methodologies in the Industrials sector but year to date it is a different story as FXR leads the pack by more than 100 basis points, having rallied 12.06%.