XLI has other problems, including exposure to downtrodden transportation stocks. Year-to-date, the iShares Transportation Average ETF (NYSEArca: IYT), the ETF proxy for the Dow Jones Transportation Average Index, is off 11.5% and the largest transportation ETF is getting no help from the industry groups represented in the fund. Stymied by tumbling shares of railroad operators and airlines that have surprisingly fallen in unison with oil prices, transportation exchange traded funds have recently been disappointments. [Transportation ETFs Need Help]
Railroads and airlines combine for over 14% of XLI’s weight. Add to that, there is more dour technical news for XLI, an ETF that has bled $1.92 billion in assets this year.
“But the bad news on the technical front does not stop there. In June, it moved below chart support and during the market’s July rally it managed to reach that level once again – where it was unceremoniously stopped and fell away in a hurry. That is a classic example of a technical breakdown and test. Bears missing their chance to get out in June rushed in to sell when they had their second shot in July,” according to Barron’s.
ETF Trends editorial team contributed to this post.
