Should You Invest in the Industrial Select Sector SPDR ETF (XLI)?

Core Insights - The Industrial Select Sector SPDR ETF (XLI) is designed to provide broad exposure to the Industrials sector, launched on December 16, 1998, and has become a popular choice among retail and institutional investors due to its low costs and tax efficiency [1][2] Fund Overview - XLI is sponsored by State Street Investment Management and has over $23.35 billion in assets, making it the largest ETF in the Industrials sector [3] - The ETF aims to match the performance of the Industrial Select Sector Index, which includes various industries such as aerospace, machinery, and logistics [4] Cost Structure - The ETF has an annual operating expense ratio of 0.08%, positioning it as one of the least expensive options in the market, with a 12-month trailing dividend yield of 1.28% [5] Sector Exposure and Holdings - XLI has a 100% allocation in the Industrials sector, with General Electric (GE) making up approximately 6.06% of total assets, and the top 10 holdings accounting for about 37.98% of total assets [6][7] Performance Metrics - The ETF has returned approximately 15.11% and is up about 22.94% year-to-date as of August 11, 2025, with a trading range between $116.42 and $154.99 over the past 52 weeks [8] - XLI has a beta of 1.07 and a standard deviation of 17.12% over the trailing three-year period, indicating a medium risk profile [8] Investment Alternatives - XLI holds a Zacks ETF Rank of 1 (Strong Buy), indicating strong expected returns and favorable metrics compared to other ETFs in the sector [9] - Other ETFs in the Industrials space include the First Trust RBA American Industrial Renaissance ETF (AIRR) and the Vanguard Industrials ETF (VIS), with AIRR having $4.55 billion in assets and VIS having $6.06 billion [11]