Industrial Select Sector SPDR Fund

This SPDR is one of several ETFs available to investors seeking exposure to the U.S. industrials sector, offering a way to access a corner of the U.S. economy that includes transportation firms, providers of commercial and professional services, and manufacturers of capital goods. Given the sector-specific focus, XLI likely doesn't deserve a core allocation, but may be useful as a means of implementing a tactical tilt towards the industrials sector or as part of a sector rotation strategy. The primary appeal of XLI lies in the impressive liquidity; used widely as a trading vehicle by active investors, XLI will generally feature very narrow bid-ask spreads. The depth of the XLI portfolio, however, leaves something to be desired. This ETF has far fewer holdings than options such as VIS, FIL, and IYJ, and also maintains a big weighting in GE. Those seeking to steer clear of concentrations in single stocks may prefer the equal-weighted RGI, while those seeking exposure to ex-U.S. industrials may find IPN to be a useful tool. XLI is great for investors seeking a quick entry into the industrials sector, but those seeking exposure over the long term may want to find a more balanced option.