Industrial Select Sector SPDR Fund (XLI) ETF

Technical Score (1D)

NEUTRAL

News Sentiment

MIXED

What's happening to XLI today?

XLI was highlighted on Oct 14 as investors revisited the valuation premium on its holding in CAT. On Oct 13, Caterpillar shares fell as investors questioned the premium attached to its data‑center power business, a move that mirrored a broader slide for the month. The decline came after a trading session that eroded the valuation premium investors had placed on the company’s data‑center operations, according to the article. Analysts reported that they had shifted favor toward Caterpillar over Deere, citing higher price targets and stronger upside potential for the machine maker. The same analysts noted that Caterpillar’s year‑to‑date performance outpaced Deere and the broader market, reinforcing the view that the company’s growth prospects were compelling. Meanwhile, another article highlighted a tension between the traditional cyclical valuation of Caterpillar’s earnings and the current growth‑style pricing that values the firm at more than 29 times expected earnings. The article questioned whether the company’s steady aftermarket revenue from parts, service, and financing supports the premium, noting its absence from top undervalued stock lists.

News Sentiment Analysis

Sentiment gathered from recent headlines

49/100

Strong NegativeNeutralStrong Positive

MIXED

Recent News Coverage (Top ETF Holdings)

ETF: XLI

0+ articles

Last updated: February 15, 2026

Industrial Select Sector SPDR Fund (XLI) - Investment Factors

The Industrial Select Sector SPDR Fund (XLI) provides targeted exposure to the industrial sector, tracking an index of companies classified as industrial firms. This ETF is structured as a non-diversified fund, meaning it may hold a smaller number of securities, potentially increasing its sensitivity to the performance of individual holdings. XLI's focus on industrial companies makes it a play on economic growth and infrastructure development.

XLI's portfolio is concentrated in key industrial segments, including aerospace and defense, industrial conglomerates, and machinery. The fund's holdings are weighted by market capitalization, which means that larger companies within the industrial sector have a greater influence on the fund's performance.

Sector Focus

XLI is an ETF designed to mirror the performance of the industrial sector. The fund's holdings are selected from the Global Industry Classification Standard (GICS) industrial sector.

This sector-specific focus allows investors to gain targeted exposure to industries like aerospace and defense, industrial conglomerates, and marine transportation.

The fund's structure provides a straightforward way to invest in a broad basket of industrial companies, offering diversification within the sector.

Top Holdings

The top holdings of XLI include GE Aerospace, RTX Corp, Caterpillar Inc, Boeing Co, and Honeywell International Inc.

These top five holdings represent a significant portion of the fund's total assets, indicating a moderate level of concentration.

Index Tracking

XLI aims to replicate the performance of an index composed of industrial sector companies.

The fund's performance will closely mirror the movements of its underlying index, less fees and expenses.

Tracking quality is a key metric to assess how well the ETF mirrors its benchmark index.

Concentration Risk

XLI's non-diversified structure means it may have a higher concentration in its top holdings compared to a diversified fund.

The fund's performance is more sensitive to the performance of its largest holdings.

Portfolio Role

XLI can serve as a core holding for investors seeking industrial sector exposure.

It can also be used to overweight or underweight the industrial sector within a broader portfolio allocation strategy.

Consider XLI as a tactical tool to express views on economic growth and infrastructure spending.

Positioning XLI

Assess your current sector allocations and determine if XLI aligns with your investment goals and risk tolerance. Evaluate the fund's top holdings and their potential impact on performance. Regularly review XLI's performance and compare it to its benchmark index to ensure effective tracking.

What Influences XLI?

XLI tracks the Industrial Select Sector Index, offering exposure to U.S. industrial companies. Its performance hinges on the cyclical nature of industrial activity and the fortunes of its top holdings.

Industrial Activity

Economic expansions fuel demand for industrial goods and services, directly benefiting XLI's holdings. Increased capital expenditure by businesses and infrastructure spending are key drivers.

As industrial production rises, the ETF tends to reflect this growth, with positive earnings surprises from its top holdings amplifying returns.

Top Holdings Performance

XLI's performance is significantly influenced by its top holdings, including GE Aerospace, RTX Corp, and Caterpillar Inc. The ETF's concentration in these companies means their individual performance has an outsized impact.

Positive earnings reports or strong order backlogs from these key holdings often lead to gains in XLI, while negative news can trigger declines. The ETF's non-diversified nature amplifies these effects.

Index Methodology & Fees

XLI's expense ratio and tracking error relative to the Industrial Select Sector Index influence its returns. The fund's ability to closely replicate the index is crucial for investors.

Changes in the index methodology, such as rebalancing or changes in constituent weights, can also affect the ETF's performance. Higher fees can slightly detract from returns over time.

Key insight: Investors should monitor industrial production data, the earnings of XLI's top holdings, and the fund's expense ratio to understand its potential performance.

Key Metrics for XLI

These metrics help assess the ETF's efficiency and its alignment with investor objectives.

Holdings Concentration: Assesses the distribution of assets across the ETF's holdings. High concentration, as seen with top holdings like GE Aerospace and RTX Corp, can amplify the impact of individual stock performance. Monitor changes in top holdings to understand shifts in sector exposure and potential risks.

Tracking Quality: Evaluates how closely XLI mirrors the performance of its underlying index. A wider tracking difference suggests higher costs or replication challenges. Consistent tracking is essential for investors seeking precise industrial sector exposure.

Expense Ratio Impact: The expense ratio is a key factor in net returns. While not provided, monitor the expense ratio to understand the ongoing cost of holding XLI. A higher expense ratio can erode returns, especially in periods of low market volatility.

Sector Dynamics: Examines the performance of the industrial sector and its key sub-industries. The ETF's holdings in aerospace, defense, and machinery, as indicated by its groups, are sensitive to economic cycles. Strong performance in these areas can drive XLI's returns.

Trading Volume & Spreads: Measures the ETF's liquidity and trading costs. Wider bid-ask spreads and lower trading volumes can increase transaction costs. Monitor these metrics to ensure efficient entry and exit from XLI, especially during volatile market conditions.

Volatility Regime: Assesses the ETF's sensitivity to market fluctuations. XLI's performance can be influenced by changes in the overall market volatility. Tracking volatility helps investors understand the potential for gains and losses within the industrial sector.

Risk Factors to Monitor

XLI's performance is tied to the industrial sector, making it sensitive to economic cycles and specific industry dynamics. Concentration in top holdings and sector-specific events pose additional risks.

Aerospace Downturn Risk
The fund's significant exposure to aerospace and defense companies makes it vulnerable to industry-specific downturns. A decline in commercial air travel, changes in government defense spending, or supply chain disruptions could negatively impact the performance of these holdings, thereby affecting XLI's overall returns. This risk is heightened if geopolitical tensions ease, reducing defense spending.
Concentration in Top Holdings
The fund's performance is significantly influenced by its top holdings, such as GE Aerospace and RTX Corp. Adverse developments at these companies, including earnings disappointments, regulatory issues, or operational challenges, could disproportionately affect the fund's value. This risk is amplified if the concentration in the top holdings increases over time.
Economic Cycle Sensitivity
As an industrial sector ETF, XLI is highly sensitive to the economic cycle. A slowdown in global economic growth, particularly in manufacturing and infrastructure spending, could lead to decreased demand for industrial goods and services. This could result in lower revenues and earnings for the fund's underlying holdings, negatively impacting XLI's performance.
Interest Rate Impact
Rising interest rates can increase borrowing costs for industrial companies, potentially impacting their profitability and investment decisions. Higher rates may also make alternative investments more attractive, leading to outflows from industrial stocks. This risk is particularly relevant if the Federal Reserve adopts a more hawkish monetary policy.
Supply Chain Disruptions
Industrial companies are often reliant on complex global supply chains. Disruptions to these supply chains, whether due to geopolitical events, natural disasters, or trade disputes, can increase costs and reduce production. This can lead to lower earnings for the fund's holdings and, consequently, a decline in XLI's value.
Expense Ratio Drag
The fund's expense ratio, while not explicitly provided, represents a continuous cost that can erode returns over time. Higher expense ratios reduce the net returns available to investors, especially during periods of low market returns. This effect is compounded during periods of market volatility when trading costs may also increase.

Frequently Asked Questions

What does the Industrial Select Sector SPDR Fund (XLI) invest in?

XLI aims to mirror the Industrial Select Sector Index. This index is comprised of U.S. industrial companies, as defined by the Global Industry Classification Standard. The fund's holdings span sectors like aerospace and defense, industrial conglomerates, and marine transportation, offering targeted exposure to the industrial sector.

What is the expense ratio for XLI?

Expense ratio information for XLI was not available in the provided data. This ratio is a key factor in evaluating the fund's overall cost.

What are the top holdings of XLI?

XLI's top holdings include GE Aerospace, RTX Corp, Caterpillar Inc, Boeing Co, and Honeywell International Inc. These top five holdings represent a significant portion of the fund's portfolio.

Is XLI an actively managed or passively managed ETF?

XLI is a passively managed ETF. It seeks to replicate the performance of the Industrial Select Sector Index. This structure means the fund's performance will closely track the index, less fees and expenses, rather than relying on active stock selection by a fund manager.

What is the market capitalization of XLI?

Market capitalization data for XLI was not available in the provided data. Investors often use market capitalization to assess an ETF's size and liquidity. Reviewing the fund's assets under management (AUM) can offer insights into its overall size and trading volume.

How does XLI compare to other industrial sector ETFs?

XLI's performance can be compared against other industrial sector ETFs by examining their holdings, expense ratios, and tracking error. Consider the specific index each ETF tracks and the methodology used. Comparing these factors can help investors determine which ETF aligns best with their investment objectives.

What are the potential risks of investing in XLI?

Investing in XLI carries risks associated with the industrial sector, including economic cycles, interest rate fluctuations, and geopolitical events. The fund's concentration in specific industrial sub-sectors can amplify these risks.

How liquid is XLI?

Liquidity information for XLI was not available in the provided data. ETF liquidity is typically assessed by trading volume and bid-ask spreads. Higher trading volume generally indicates greater liquidity, which can affect the ease with which investors can buy or sell shares.

What is the 52-week high and low for XLI?

XLI's 52-week high was 177.755, and its 52-week low was 112.75. These figures provide a range of the fund's price movement over the past year. Analyzing these levels can offer insights into the fund's volatility and potential support and resistance levels.

What is the sector breakdown of XLI?

XLI's sector breakdown is primarily focused on industrial companies, including aerospace and defense, industrial conglomerates, and marine transportation. The specific weightings of these sub-sectors can vary over time.

News Sentiment Analysis

Sentiment gathered from recent headlines

49/100

Strong NegativeNeutralStrong Positive

MIXED

Recent News Coverage (Top ETF Holdings)

ETF: XLI

0+ articles

Last updated: February 15, 2026

Industrial Select Sector SPDR Fund (XLI) - Investment Factors

Sector Focus

XLI is an ETF designed to mirror the performance of the industrial sector. The fund's holdings are selected from the Global Industry Classification Standard (GICS) industrial sector.

This sector-specific focus allows investors to gain targeted exposure to industries like aerospace and defense, industrial conglomerates, and marine transportation.

The fund's structure provides a straightforward way to invest in a broad basket of industrial companies, offering diversification within the sector.

Top Holdings

The top holdings of XLI include GE Aerospace, RTX Corp, Caterpillar Inc, Boeing Co, and Honeywell International Inc.

These top five holdings represent a significant portion of the fund's total assets, indicating a moderate level of concentration.

Index Tracking

XLI aims to replicate the performance of an index composed of industrial sector companies.

The fund's performance will closely mirror the movements of its underlying index, less fees and expenses.

Tracking quality is a key metric to assess how well the ETF mirrors its benchmark index.

Concentration Risk

XLI's non-diversified structure means it may have a higher concentration in its top holdings compared to a diversified fund.

The fund's performance is more sensitive to the performance of its largest holdings.

Portfolio Role

XLI can serve as a core holding for investors seeking industrial sector exposure.

It can also be used to overweight or underweight the industrial sector within a broader portfolio allocation strategy.

Consider XLI as a tactical tool to express views on economic growth and infrastructure spending.

Positioning XLI

What Influences XLI?

Industrial Activity

Economic expansions fuel demand for industrial goods and services, directly benefiting XLI's holdings. Increased capital expenditure by businesses and infrastructure spending are key drivers.

As industrial production rises, the ETF tends to reflect this growth, with positive earnings surprises from its top holdings amplifying returns.

Top Holdings Performance

Index Methodology & Fees

XLI's expense ratio and tracking error relative to the Industrial Select Sector Index influence its returns. The fund's ability to closely replicate the index is crucial for investors.

Changes in the index methodology, such as rebalancing or changes in constituent weights, can also affect the ETF's performance. Higher fees can slightly detract from returns over time.

Key insight: Investors should monitor industrial production data, the earnings of XLI's top holdings, and the fund's expense ratio to understand its potential performance.

Key Metrics for XLI

These metrics help assess the ETF's efficiency and its alignment with investor objectives.

Risk Factors to Monitor

Aerospace Downturn Risk
The fund's significant exposure to aerospace and defense companies makes it vulnerable to industry-specific downturns. A decline in commercial air travel, changes in government defense spending, or supply chain disruptions could negatively impact the performance of these holdings, thereby affecting XLI's overall returns. This risk is heightened if geopolitical tensions ease, reducing defense spending.
Concentration in Top Holdings
The fund's performance is significantly influenced by its top holdings, such as GE Aerospace and RTX Corp. Adverse developments at these companies, including earnings disappointments, regulatory issues, or operational challenges, could disproportionately affect the fund's value. This risk is amplified if the concentration in the top holdings increases over time.
Economic Cycle Sensitivity
As an industrial sector ETF, XLI is highly sensitive to the economic cycle. A slowdown in global economic growth, particularly in manufacturing and infrastructure spending, could lead to decreased demand for industrial goods and services. This could result in lower revenues and earnings for the fund's underlying holdings, negatively impacting XLI's performance.
Interest Rate Impact
Rising interest rates can increase borrowing costs for industrial companies, potentially impacting their profitability and investment decisions. Higher rates may also make alternative investments more attractive, leading to outflows from industrial stocks. This risk is particularly relevant if the Federal Reserve adopts a more hawkish monetary policy.
Supply Chain Disruptions
Industrial companies are often reliant on complex global supply chains. Disruptions to these supply chains, whether due to geopolitical events, natural disasters, or trade disputes, can increase costs and reduce production. This can lead to lower earnings for the fund's holdings and, consequently, a decline in XLI's value.
Expense Ratio Drag
The fund's expense ratio, while not explicitly provided, represents a continuous cost that can erode returns over time. Higher expense ratios reduce the net returns available to investors, especially during periods of low market returns. This effect is compounded during periods of market volatility when trading costs may also increase.

Frequently Asked Questions

What does the Industrial Select Sector SPDR Fund (XLI) invest in?

What is the expense ratio for XLI?

Expense ratio information for XLI was not available in the provided data. This ratio is a key factor in evaluating the fund's overall cost.

What are the top holdings of XLI?

XLI's top holdings include GE Aerospace, RTX Corp, Caterpillar Inc, Boeing Co, and Honeywell International Inc. These top five holdings represent a significant portion of the fund's portfolio.

Is XLI an actively managed or passively managed ETF?

What is the market capitalization of XLI?

How does XLI compare to other industrial sector ETFs?

What are the potential risks of investing in XLI?

How liquid is XLI?

What is the 52-week high and low for XLI?

What is the sector breakdown of XLI?

XLI·Industrial Select Sector SPDR Fund

What's happening to XLI today?

News Sentiment Analysis

Recent News Coverage (Top ETF Holdings)

Discover More

Industrial Select Sector SPDR Fund (XLI) - Investment Factors

Sector Focus

Top Holdings

Index Tracking

Concentration Risk

Portfolio Role

Positioning XLI

What Influences XLI?

Industrial Activity

Top Holdings Performance

Index Methodology & Fees

Key Metrics for XLI

Risk Factors to Monitor

Frequently Asked Questions

News Sentiment Analysis

Recent News Coverage (Top ETF Holdings)

Discover More

Industrial Select Sector SPDR Fund (XLI) - Investment Factors

Sector Focus

Top Holdings

Index Tracking

Concentration Risk

Portfolio Role

Positioning XLI

What Influences XLI?

Industrial Activity

Top Holdings Performance

Index Methodology & Fees

Key Metrics for XLI

Risk Factors to Monitor

Frequently Asked Questions