Bolstering the case for industrial ETFs are favorable seasonal trends. Although October is not a great month for stocks and a downright bad month for gold and small-caps, the tenth month of the year has been historically a good time to establish positions in cyclical sectors.
Additionally, should tapering fears reenter the conversation, forcing 10-year Treasury yields higher in the process, industrial ETFs could remain attractive. On a historical basis, only consumer discretionary stocks outpace industrials in rising interest rate environments.
Industrial Select Sector SPDR
ETF Trends editorial team contributed to this post. Tom Lydon’s clients own shares of GE.