When constructing a well-diversified portfolio, exchange traded fund investors should consider including various sectors to enhance their market exposure. For instance, the industrial sector may provide individuals with exposure to strong earnings growth, according to S&P analysts.

ETFs tracking the industrial sector led the market lower during the summer sell-off. However, industrial ETFs have outperformed the overall S&P 500 since the market bottom in October.

Industrial and materials stocks are two former laggards that have seen big turnarounds this year, says Bespoke Investment Group. “Both of these sectors came under pressure last year because of their heavy international exposure and slower global economic growth, but so far this year investors are looking at the greener side of the grass,” the firm points out.

S&P Capital IQ’s Equity Strategy Group raised its recommendation on the industrials sector to “overweight” due to macroeconomic factors and strong earnings growth potential, according to a research note.

According to Alec Young, Global Equity Strategist at S&P, the sector may outperform as investors discount the recovery in the U.S., along with strong growth from Asia, while the Eurozone contains its financial problems. Young also projects industrials will gain 13% over 2012, compared to the S&P 500’s 8.1% estimate.

Jim Corridore, industrials and logistics equity analyst at S&P, says heavy industrial machinery, equipment rental, truck and truck engine manufacturing and package delivery will all benefit from higher global demand this year.

S&P Capital IQ ranks the sector as overweight on performance, risk and cost considerations, including bid/ask spread, expense ratio, standard deviation and technical analysis, among others.