It has been a decent though not awe-inspiring year for the industrial sector. The Industrial Select Sector SPDR (NYSEArca: XLI), the largest industrial sector exchange traded fund, is up nearly 10%, trailing the 13% gain for the S&P 500.
That ranks XLI sixth among the nine sector SPDR ETFs. While investors may be left with a “it could have been worse” feeling regarding industrial ETFs, it is worth pointing out that the sector delivered some gems this year, repeating a scenario seen in 2013 when sub-sector aerospace and defense ETFs led industrial offerings. [Aerospace ETFs Prove Reliable]
This year, it has been transportation ETFs delivering for investors, namely the SPDR S&P Transportation ETF (NYSEArca: XTN). XTN leads all non-leveraged industrial sector ETFs with a year-to-date gain of 33.3%.
Proving that the equal-weight methodology works well with sector ETFs, XTN has outpaced its cap-weighted counterpart, the iShares Transportation Average ETF (NYSEArca: IYT), by over 800 basis points this year. [This Year’s Best Materials ETF]
Prior to this year, XTN was, to put it delicately, overlooked compared to IYT. That scenario changed in 2014 as investors have allocated nearly $410 million to the equal-weight XTN. That is $410 million of the ETF’s $556 million in assets under management, making XTN one of the fastest growing industry ETFs on a percentage basis.