|Bid||28.68 x 1000|
|Ask||28.71 x 1200|
|Day's Range||28.58 - 28.70|
|52 Week Range||20.44 - 29.14|
|PE Ratio (TTM)||N/A|
|YTD Daily Total Return||31.53%|
|Beta (3Y Monthly)||1.35|
|Expense Ratio (net)||0.70%|
A few sector ETFs have outperformed the market. We have highlighted five such ETFs that have raked in substantial gains in September and could be better plays if the trend prevails.
It may seem hard to believe following the carnage seen on Friday, Aug 23, but the S&P 500 is still higher by 1.2% over the past 90 days. Perhaps what is not surprising is that with stocks being smacked around on the back of trade tensions, tariff-sensitive sectors are suffering. This is true for some industrial ETFs as well.While not as export-dependent as the energy or technology sectors, industrials aren't as export-defensive as, say, healthcare, real estate or utilities. As such, the Industrial Select Sector SPDR (NYSEARCA:XLI), the largest industrial ETF, is lower by a market-lagging half a percent.To be fair, there are some bright spots among industrial ETFs, thanks in large part to a recent rebound by Dow component Boeing (NYSE:BA), meaning some aerospace and defense have been holding up. Conversely, some other industrial ETFs are languishing.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 Tech Industry Dividend Stocks for Growth and Income Here, we'll look at some of the industrial ETFs investors would be best served by leaving alone for the time being. Invesco S&P SmallCap Industrials ETF (PSCI)Source: Shutterstock Expense ratio: 0.29%When small-cap stocks are part of the problem (and they currently are), not part of the solution, investors ought to steer clear of the related sector funds, including the Invesco S&P SmallCap Industrials ETF (NASDAQ:PSCI).Perhaps the best thing that can be said of this industrial ETF is that over the past 90 days, the fund has performed less poorly than the S&P SmallCap 600 Index. Then again, PSCI has been nearly three times as bad as the large-cap XLI over the same period.Two other marks again PSCI in the current climate. First, the fund devotes nearly 39% of its weight to growth stocks, a corner of the market under pressure due to trade tensions. Second, this industrial ETF's weight of just around 13% to aerospace and defense stocks is not large enough to offset weakness in its other industry exposures. iShares Transportation Average ETF (IYT)Source: Shutterstock Expense ratio: 0.43%Opportunities may still exist with transportation funds, but the iShares Transportation Average ETF (CBOE:IYT) is one of the more economically sensitive industrial ETFs out there and that's saying something. In a vacuum, IYT's 3.6% three-month slide is concerning, but it's even more concerning in the broader context of transportation stocks being viewed as accurate tells of broader market direction.Residing more than 16% below its 52-week high, this industrial ETF face near-term technical challenges because it also labors below its 50- and 200-day moving averages. IYT fits the bill as an industrial ETF to watch, but not one to buy right now. * 10 Companies Using AI to Grow "Just as some equity analysts were providing commentary about potentially becoming more constructive on the transportation stocks, the next shoe dropped," according to Freight Waves. "While investors were purportedly sniffing around the space looking for bargains, likely not interested in a full basket approach to owning the transports, a new round of Chinese tariffs were announced, taking the breath out of the transports." First Trust RBA American Industrial Renaissance ETF (AIRR)Source: Shutterstock Expense ratio: 0.70%The First Trust RBA American Industrial Renaissance ETF (NASDAQ:AIRR) would be one of those industrial ETFs that when the sector is working, it could really deliver for investors. However, that is not the current state of affairs for the sector and last Friday's price action suggests AIRR's 8.41% month-to-date loss could easily increase.AIRR isn't a pure industrial ETF; it allocates about 10% of its weight to financial services stocks, but if industrial exposure is going to be augmented right, best not to do it with another scuffling sector. Compounding that issue is that AIRR's bank holdings are located in states that are major manufacturing centers, a trait that is only valuable if the U.S. can continue avoiding a recession.Hopefully, that will be the case, but this industrial ETF has another reason to avoid it: the median market value of its 56 holdings is around $1.5 billion, meaning it's a small-cap fund at a time when smaller stocks are languishing. John Hancock Multifactor Industrials ETF (JHMI)Source: Shutterstock Expense ratio: 0.40%The John Hancock Multifactor Industrials ETF (NYSEARCA:JHMI) is another example of an industrial ETF that would certainly be worth embracing if sentiment surrounding the sector wasn't as dour as it is now. Technically speaking, there are concerns here, chief among that a drop of the 200-day line that JHMI is clinging to could lead to rapid share price erosion.JHMI is advertised as a multi-factor fund, but the factors it emphasizes -- value, size and profitability -- are not used in its security selection process. JHMI and other Hancock's other sector ETFs track indexes developed by Dimensional Fund Advisors."Dimensional's approach to sector indexing directly targets factors associated with higher expected returns, provide broad diversification to increase the reliability of capturing sector beta relative to strategies that are concentrated or ignore market prices, and aim to limit turnover to trades that meaningfully affect expected returns," according to ETF Trends. * 7 of Worst ETFs -- Boot These From Your Portfolio Right Now In fairness to this industrial ETF, it has been performing less poorly this month traditional industrial ETFs, indicating that if risk appetite is renewed and cyclical stocks rally, this fund is poised for some upside. iShares Global Industrials ETF (EXI)Source: Shutterstock Expense ratio: 0.46%As its name implies, the iShares Global Industrials ETF (NYSEARCA:EXI) is a global ETF, meaning investors should expect hefty exposure to domestic equities with sprinkles of industrial stocks from other large developed markets. That would be an alluring combination if the world's two largest economies weren't mired in a trade war and some other big economies weren't flirting with recessions.However, those are conditions investors are contending with right now and as a result, EXI is trailing the MSCI All-Country World Index by 100 basis points this month. EXI allocates over 68% of its combined weight to the U.S. and Japan, but a significant portion of the remaining portfolio is allocated to Europe, a region where several major economies are weakening. Oh yeah, President Trump could easily target Europe with trade tariffs, too.Even if cyclical stocks can get their mojo back, the moving geographical parts of EXI may say that investors looking to wade back into industrials would be better served doing so with a domestic focus. EXI only trades at a slight discount to the MSCI ACWI Index, which could be too much optimism given the recent lethargy in the industrial sector.Todd Shriber does not own any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Tech Industry Dividend Stocks for Growth and Income * 7 Stocks the Insiders Are Buying on Sale * 7 of the Worst Stocks on Wall Street The post Just Leave These 5 Industrial ETFs Alone for Now appeared first on InvestorPlace.
Given Caterpillar's woes, investors wanting to avoid CAT could consider industrial ETFs that have no exposure to this machinery giant. However, risk-tolerant investors might consider this as a buying opportunity.
Give the industrial sector and the related industrial ETFs some credit. Against the backdrop of recent struggles in shares of Boeing Co. (NYSE:BA), one of the sector's marquee components, industrial ETFs are holding up pretty well.Year-to-date, the Industrial Select Sector SPDR (NYSEARCA:XLI), the largest industrial ETF by assets, is up 14.20%, topping the S&P 500 by about 210 basis points in the first quarter. XLI currently allocates 8.93% of its weight to shares of Boeing, making the aerospace and defense giant by far the industrial ETF's largest holding.Impressive as many of the performances by industrial ETFs this year, investors arriving late to this party should exercise caution.InvestorPlace - Stock Market News, Stock Advice & Trading Tips"Brad Sorensen, managing director of market and sector analysis at Charles Schwab, told MarketWatch that industrial stocks' rise 'has gone too far, in part because the market is overly optimistic as to what the China trade deal will be,'" reports MarketWatch. * 7 Reasons to Buy Housing Stocks in 2019 For investors willing to take on some risk in the immediate term, some of the following industrial ETFs could be rewarding bets for the second quarter. iShares U.S. Aerospace & Defense ETF (ITA)Source: Shutterstock Expense ratio: 0.43% per year, or $43 on a $10,000 investment. Some market segments are often beholden to Capitol Hill. That can be good or bad depending on the industry in question. For the aerospace and defense industry, politics have been rewarding over the past several years. The iShares U.S. Aerospace & Defense ETF (CBOE:ITA), the largest aerospace and defense ETF, is up 71.20% over the past 36 months, easily topping traditional industrial ETFs and the S&P 500 over that period.While ITA has recently been hampered by Boeing's slide (the stock accounts for 20.62% of the fund's weight), this industrial ETF is a valid play on defense spending, which is trending higher. President Trump is proposing a fiscal-year 2020 defense budget of a staggering $750 billion.Investors considering ITA should note the following: this industrial ETF is a cap-weighted fund and is extremely top heavy. Boeing and fellow Dow component United Technologies Inc. (NYSE:UTX) combine for nearly 38% of the fund's weight, meaning those two stocks are the primary drivers of ITA's price action. Invesco SmallCap Industrials ETF (PSCI)Source: Shutterstock Expense ratio: 0.29%. Many investors think of industrial ETFs through the large-cap lens, but the Invesco SmallCap Industrials ETF (NASDAQ:PSCI) proves there are opportunities with this sector's smaller constituents. PSCI follows the S&P SmallCap 600 Capped Industrials Index, the industrial offshoot of the S&P SmallCap 600 Index.The average market capitalization of PSCI's 97 holdings is $1.76 billion, putting this fund on the higher end of the small-cap spectrum. Thirteen industry groups are represented in this small-cap ETF, which is up nearly 11% this year. * 3 Gold Stocks That Should Glitter With Rising Gold Prices While the industrial sector is usually considered a value or quality play, not a growth destination, PSCI has more of a growth feel to it, which is to be expected with a small-cap fund. This industrial ETF allocates 40.38% of its weight to growth stocks -- more than double its weight to value stocks. Invesco DWA Industrials Momentum ETF (PRN)Source: Shutterstock Expense ratio: 0.60%. Most traditional industrial ETFs are cap-weighted funds, but there is always another way of approaching weighting methodologies in the fund universe. The Invesco DWA Industrials Momentum ETF (NASDAQ:PRN) brings momentum to the industrial ETF table.PRN, which turns 13 years old later this year, follows the Dorsey Wright Industrials Technical Leaders Index and holds 38 stocks."The Index is designed to identify companies that are showing relative strength (momentum), and is composed of at least 30 securities from the NASDAQ US Benchmark Index. Relative strength is the measurement of a security's performance in a given universe over time as compared to the performance of all other securities in that universe," according to Invesco.PRN's weighting scheme makes this industrial ETF a growth fund as nearly 80% of the fund's holdings are classified as growth stocks. Global X U.S. Infrastructure Development ETF (PAVE) Source: Shutterstock Expense ratio: 0.47%. The Global X U.S. Infrastructure Development ETF (CBOE:PAVE) is not a dedicated industrial ETF, but it is an interesting thematic fund with ample exposure to industrial stocks. While not a pure play industrial ETF, PAVE does allocate more than two-thirds of its weight to the industrial sector.As is the case with some of the other funds highlighted here, PAVE can benefit from politics and the good news on that front is twofold. First, infrastructure spending is one of the rare bipartisan issues. Second, there is no doubt the U.S. faces an array of infrastructure projects that need shoring up and need those improvements immediately. * 8 Genomic Testing Stocks That Can Ease the Sting of Theranos "Making a real effort to update the U.S. infrastructure would make the most sense now while the economic environment can still support the investment," reports Forbes. "Acting now would bolster and extend the current economic growth cycle and provide the foundation for decades of growth in the future. Conversely, putting it off until after a recession has begun would push the U.S. back even further. And with the U.S. already decades behind in terms of infrastructure development, waiting simply makes it more difficult." First Trust RBA American Industrial Renaissance ETF (AIRR)Source: Shutterstock Expense ratio: 0.70%. The First Trust RBA American Industrial Renaissance ETF (NASDAQ:AIRR) is another unique alternative to the traditional industrial ETF. This fund focuses on mid- and small-cap industrial and community bank stocks. AIRR's bank exposure is capped at 10% of the fund's overall weight and those bank stocks only come from states with heavy manufacturing exposure.AIRR's 53 holdings have a median market value of $1.48 billion, indicating that this is a small-cap industrial ETF. The structure of this industrial ETF makes it sensitive to manufacturing data and fluctuations in the broader small-cap space.AIRR is up 11% this year, but on a technical basis, the fund may need to rally above $26 to lure in new buyers.Todd Shriber does not own any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Tech Stocks With Key Products That Face an Uncertain Future * 7 SaaS Stocks to Buy for Long-Term Gains * 5 Semiconductor Stocks That Are Scorching Hot Buys Compare Brokers The post 5 Industrial ETFs to Consider for the Second Quarter appeared first on InvestorPlace.