- The oldest Industrials sector ETF has outperformed an S&P 500 index fund by 1.33% CAGR over the last 20 years
- There are 27 ETFs available in the Morningstar Industrials category
- 13 of these ETFs are 10 years old or older
- This article will focus on the long-term performance of these 13 older ETFs
XLI vs S&P 500 index fund: January 1999 – October 2019
XLI vs SPY: December 22, 1998 – November 22, 2019
The oldest Industrials sector ETF is The Industrial Select Sector SPDR® Fund (XLI). This ETF’s inception date was December 12, 1998. Since inception this ETF has outperformed an S&P 500 index fund by 1.33% CAGR. This alone makes this an invest-able sector to this value investor. But, is XLI the best Industrials sector ETF based on long-term performance? Let’s find out.
There are 27 Industrials sector ETFs to pick from. 13 of these funds have been available for 10 years or longer. I have compared all 13 of these older ETFs against each other head-to-head using the back testing tools at Koyfin and Portfolio Visualizer. The chart below displays how these ETFs ranked based on long-term performance only. The yellow highlights are the superlative of each column.
The 4 best performing Industrials sector ETFs were ITA, PPA, RGI and IYT. The following charts depict how these ETFs have performed in the past.
ITA vs PPA vs RGI vs IYT: December 2006 – October 2019
ITA vs PPA vs RGI vs IYT: November 7, 2006 – November 22, 2019
ITA vs PPA: May 5, 2006 – November 22, 2019
PPA vs RGI: November 7, 2006 – November 22, 2019
RGI vs IYT: November 7, 2006 – November 22, 2019
Below are the stated objectives of these 4 top performing Industrials sector ETFs:
ITA – The iShares U.S. Aerospace & Defense ETF seeks to track the investment results of an index composed of U.S. equities in the aerospace and defense sector. Exposure to U.S. companies that manufacture commercial and military aircrafts and other defense equipment. Targeted access to domestic aerospace and defense stocks. Use to express a sector view.
PPA – The Invesco Aerospace & Defense ETF (Fund) is based on the SPADEâ„¢ Defense Index (Index). The Fund will normally invest at least 90% of its total assets in common stocks that comprise the Index. The Index is designed to identify a group of companies involved in the development, manufacturing, operations and support of US defense, homeland security and aerospace operations. The Fund and the Index are rebalanced and reconstituted quarterly.
RGI – The Invesco S&P 500® Equal Weight Industrials ETF (Fund) is based on the S&P 500® Equal Weight Industrials Index (Index). The Fund will invest at least 90% of its total assets in common stocks that comprise the Index. The Index equally weights stocks in the industrials sector of the S&P 500® Index. The Fund and the Index are rebalanced quarterly.
IYT – The iShares Transportation Average ETF seeks to track the investment results of an index composed of U.S. equities in the transportation sector. Exposure to U.S. airline, railroad, and trucking companies. Targeted access to domestic transportation stocks. Use to express a sector view.
The Industrials Sector has a long history of good performance compared to the broader U.S. markets. Investors have at least 27 ETFs to choose from in this category. If you have decided to add an Industrials sector ETF to your portfolio, it is my hope that this article will help make that decision a little easier.
Thank you for taking time to read this article. If you found it useful, please share it with a friend.
Respectfully yours, Micah McDonald, aka the Deep Value ETF Accumulator
Previous Deep Value ETF Accumulator articles on Industrials Sector ETFs:
Best Long-Term Performance Industrials Sector ETFs 1.2
Best Long-Term Performance Industrials Sector ETFs 1.1
Disclosure: We currently own shares of ITA and we intend to buy more shares in the future. I am not a professional investment advisor. Please perform you own due diligence or seek the advice of a Registered Investment Advisor before investing in any security mentioned in this article. This website contains affiliate links to M1 Finance and Google AdSense.