Industrial ETFs Get a Boost Following First Presidential Debate

The day after the first U.S. presidential debate between hopeful Joe Biden and current president Donald Trump saw the Dow Jones Industrial Average jump 300 points on perceived optimism for a Covid-19 vaccine. Furthermore, industrial exchange-traded funds (ETFs) saw a nice bump higher with tailwinds from positive economic data.

“Exchange-traded funds focused on the industrial sector rallied Wednesday amid a rebound for stocks as economic data surprised to the upside,” a MarketWatch article said. “The Industrial Select Sector SPDR Fund gained 1.5% at midday, making it one of the biggest sector-tracker winners of the day. The iShares U.S. Industrials ETF was 1.3% higher.”

“In addition to shipping and heavy machinery companies that will benefit from an economic second wind, the sector includes shares of airline companies, which were sharply higher Wednesday,” the article added. “United Airlines Holding Inc. shares were up nearly 4%, and Delta Air Lines Inc. shares gained 2.3% as investors absorbed promising news about coronavirus treatments and continued to bank on Washington delivering an additional round of stimulus. Over the past three months, the SPDR fund has gained 13.5% and the iShares fund is up 12.2%, both beating the 9% increase for the S&P 500 SPX. And over the past month, both are essentially flat, beating the broad market’s 4% decline.”

For traders looking for leveraged opportunities in the industrial sector, they can look specifically at the Direxion Daily Industrials Bull 3X Shares Direxion Daily Industrials Bull 3 (DUSL). The fund seeks daily investment results, before fees and expenses, of 300% of the daily performance of the Industrials Select Sector Index.

DUSL Chart

DUSL data by YCharts

The fund, under normal circumstances, invests at least 80% of its net assets (plus borrowing for investment purposes) in financial instruments and securities of the index, ETFs that track the index and other financial instruments that provide daily leveraged exposure to the index or ETFs that track the index. The index includes domestic companies from the industrials sector which includes the following industries: aerospace and defense; industrial conglomerates; marine and etc.

Another un-leveraged fund investors may want to check out is the Vanguard Industrials Index Fund ETF Shares (VIS). VIS seeks to track the performance of a benchmark in, and employs an indexing investment approach designed to track the performance of the MSCI US Investable Market Index (IMI)/Industrials 25/50, an index made up of stocks of large, mid-size, and small U.S. companies within the industrials sector, as classified under the Global Industry Classification Standard (GICS).

For more market trends, visit ETF Trends.