For example, Industrials Select Sector SPDR (XLI) is the largest with $7.8 billion in assets. The ETF traded 14 million shares on a daily basis in the past month and had a $0.01 bid/ask spread. Aerospace & defense companies, such as Boeing (BA), and industrial conglomerates, such as General Electric (GE) were the largest industries at 23% and 21% of assets, respectively.
In addition, there are allocation differences. VIS and FIDU have less exposure to aerospace & defensive companies and more exposure to road & rail companies than XLI, due in part to having more small- and mid-cap companies. While all three ETFs earn a top ranking of Overweight in our research, the exposure differences impact their performance record.
However, the more narrowly focused SPDR S&P Transportation (XTN) has outperformed these industrial ETF products. Relative to the above ETFs, XTN has more exposure to airlines, such as American Airlines (AAL), road & rail companies, such as Swift Transportation (SWFT) and air freight & logistics companies, such as FedEx (FDX).
A competing product, iShares Transportation Average ETF (IYT) has more exposure to air freight & logistics companies such as FDS and United Parcel Services (UPS) and less exposure to airlines, but holds Alaska Air (ALK).