The industrial sector and the corresponding exchange traded funds endured a slack earnings report recently from Dow component General Electric Co. (NYSE: GE) to steadily climb higher. In fact, many of the marquee industrial ETFs reside at or near new highs.

That includes the iShares U.S. Industrials ETF (NYSEArca: IYJ), which is up 3.5% year-to-date and more than 34% over the past year.

Although the aerospace and defense industry is perceived as being beholden to Uncle Sam’s whims, the allure of late-cycle sectors, including industrials, in a rising rate environment remains in place. Industrials perform well when interest rates rise because rising rates can go hand-in-hand with economic growth. Increased infrastructure spending is also seen as a catalyst for industrial stocks and ETFs.

Hence why industrial ETFs are seen as prime beneficiaries of Donald Trump occupying the White House. On the campaign trail, Trump pledged to spend $1 trillion to shore up America’s roads, bridges, railways and other infrastructure.

Subscribe to our free daily newsletters!
Please enter your email address to subscribe to ETF Trends' newsletters featuring latest news and educational events.