While the industrial sector has some exposure to the oil industry, other areas of the economy may still prop up the sector. Industrial companies may capitalize on increased consumer spending and reduced input costs as a result of cheaper oil prices.
For instance, XLI’s top sector allocations include aerospace & defense 27.0%, industrial conglomerates 18.5%, machinery 16.1%, road & rail 11.0%, air freight & logistics 7.2% and electrical equipment 5.7%. [New Government Budget Could Fuel Defense ETFs]
Industrial Select Sector SPDR
For more information on the industrials sector, visit our industrials category.
Max Chen contributed to this article.
Full disclosure: Tom Lydon’s clients own shares of SPY.