Industrials

Why invest in Industrials

Group of companies that are engaged in production of goods that help in production of other goods and services for the rest of economy.  Example machinery, aerospace, defense, construction, tools , cement etc. Benefits when the economy is in expansion phase. Industrial companies are needed for up keep and maintenance of the existing infrastructure. The companies in this sector tend to be capital intensive . They generally have  reasonable valuations compared to other sectors. However  the debt burden is high due to constant maintenance . Companies work in a low margin environment  and can face downward  pricing pressure . Sector is interest rate sensitive.

Key indicators to consider before investing

Top 5 ETF’s by Market Capitalization

Name of the Fund Ticker Symbol /Total AUM* Year of Inception Expense Ratio
 Industrial Select Sector SPDR XLI  12/16/1998 0.14%
 Vanguard Industrial VIS  09/23/2004 0.10%
 iShares Dow Jones US Industrials IYJ  06/12/2000 0.44%
 iShares Dow Jones US Aerospace and Defense ITA  05/01/2006 0.44%
 iShares Dow Jones Transport Average  IYT  10/06/2003 0.44%

 

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