iShares Dow Jones US IndustrialIYJ

Morningstar Rating

ETF Research and Analysis

by Robert Goldsborough

Suitability
Investors seeking industrials-sector exposure in a diversified portfolio can consider the sector-specific exchange-traded fund iShares Dow Jones U.S. Industrial IYJ. This ETF is suitable as a tactical investment and only Read more

Bull Case

Many of the large-cap holdings of this fund are positioned to benefit from increased capital-goods spending in developing countries.

U.S. manufacturing activity has been expanding.

Although this ETF owns only U.S. companies, many of the holdings have significant sales outside of the United States, giving IYJ some exposure to global growth trends. Read more

Bear Case

Defense companies can alter the expected cyclical performance of XLI and currently are facing issues from sequestration.

IYJ's expense ratio is much higher than that of two other peer funds, whose performance is almost perfectly correlated with that of IYJ. As a result, investors might want to consider those cheaper options.

Debt problems in European countries could weigh on the performance of this fund. Read more