Industrial ETF (XLI) Gets a Helping Hand from General Electric | ETF Trends

One exchange traded fund (ETF) that has been a strong performer lately is the Industrial Select Sector SPDR (XLI). In fact, it recently hit a new high and is currently up 19.5% year-to-date.

General Electric’s (GE) success could be one of the factors behind XLI’s increase, as it is the top holding in the ETF at 19.9%. General Electric’s new strategy of divesting slower growth units in favor of faster growing businesses, such as health care and water processing technology, seems to be working well. In addition, some analysts say strength in the company’s global infrastructure unit, which makes products from aircraft engines to steam turbines, has been a solid profit driver, the Associated Press reports. GE expects to generate $50 billion in annual revenue from emerging markets by 2010.

However, XLI’s second-largest holding Boeing (BA) has been in some trouble lately that could negatively impact the ETF. Boeing admitted yesterday that the 787 Dreamliner will be delayed by six months because it’s struggling to assemble the revolutionary new aircraft, reports David Robertson for The Times. Boeings shares fell nearly 3% yesterday afternoon on the news and are down today as well. Fortunately, even though Boeing is XLI’s second-largest holding, it only makes up 5.4% of the ETF.


The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.