Morningstar Rating

ETF Research and Analysis

by Robert Goldsborough
Investors seeking industrials exposure in a diversified portfolio can consider the sector-specific exchange-traded fund iShares U.S. Industrials ETF IYJ. The main subsectors covered in this fund are aerospace and defense   Read more 

Bull Case

This is a high-quality portfolio, with 79% of assets invested in firms with economic moats.
As the economic recovery continues, late-cycle firms in this ETF could shine.
Many of the industrials firms held in this ETF have made themselves leaner and more efficient since the downturn. Read more 

Bear Case

The aerospace and U.S. nonresidential construction segments have continued to struggle.
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.
Defense companies currently are facing reduced government spending because of U.S. budget sequestration. Read more 

Online Giants in a Single Fund 
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