As momentum stocks from biotechnology to Internet to social media stumble, investors are committing capital to old line industrial stocks and exchange traded funds, a sector that is seen as 180 degrees removed from previously sexy biotech and social media.
Entering Monday’s trading session, the Industrial Select Sector SPDR (NYSEArca: XLI) offered only a middling year-to-date performance among the nine sector SPDR ETFs, beating just three while trailing four and being tied with another. XLI, the largest industrial sector ETF, “took in the most deposits since it was created in 1998, drawing about $603 million over the five days,” report Lu Wang, Thomas Black and Joseph Ciolli for Bloomberg.
Top-10 holdings in XLI include Dow components General Electric (NYSE: GE), United Technologies, Boeing (NYSE: BA), 3M (NYSE: MMM) and Caterpillar (NYSE: CAT). That group combines for over 30% of XLI’s weight. Industrials, the largest sector weight in the Dow at 19.9%, was the best-performing group in the blue chip index last year with Boeing contributing more to the Dow’s 2013 upside than any other stock. [Dow Year in Review]
Investors have also poured almost $109 million into the Vanguard Industrials ETF (NYSEArca: VIS) since the start of the year.
With no dedicated airline or railroad ETFs on the market, investors have turned to the iShares Transportation Average ETF (NYSEArca: IYT) to gain exposure to those sectors. Bolstered by ongoing strength in airline stocks, IYT is higher by 4.4% this year. Railroad stocks and airlines combine for almost 44% of IYT’s weight. [Planes, Trains and Trucks Lead Transports ETFs]