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Industrial Select Sector SPDR Fund ETF (NYSEARCA:XLI), which tracks the S&P 500 Industrial sector, rose about 11.63% in the first quarter of 2024, compared to a 2.80% rise during the same period last year.
The industrial sector (SP500-20) – which has an 8.5% weightage on the S&P 500 – rose another 11.63%, marginally outperforming the broader index, which rose about 10.79% during January to March period.
On a comparative basis, the industrial sector fared better than some of its peers like Materials and Consumer Staples, while lagging behind the Technology sector, among others.
Nevertheless, a recent report indicated about 37 of the 78 stocks in the S&P 500’s industrials sector have touched all-time highs.
Across the broader S&P 500 index, about 130 stocks have hit all-time highs this year, with industrials recording the highest percentage and largest number of stocks in any sector to hit a record level in 2024, noted S&P Global Market Intelligence data.
Industrials saw regular U.S. stock fund inflows and outflows, with March 5 seeing the highest inflows since 2024 at $518.30M. By March 21st, the sector had net flows of about $800.27M.
Top five movers in Q1 (As of March 27th)
- Gainers: General Electric (GE) +40.04%
- Eaton Corp. (ETN) +29.53%
- PACCAR Inc. (PCAR) +26.81%
- Howmet Aerospace (HWM) +25.83%
- Hubbell Inc. (HUBB) +25.09%
- Losers: Boeing (BA) -27.34%
- C.H. Robinson Worldwide (CHRW) -15.27%
- Robert Half (RHI) -11.02%
- Rockwell Automation (ROK) -7.88%
- United Parcel Service (UPS) -7.41%
What Analysts Expect
The two Seeking Alpha analysts who were surveyed in the past 90 days have rated the industrial sector (XLI) a Hold. Analyst InSight Analytics believed that XLI has the potential to benefit investors with up to 5% upside banking on state programs totaling $1.8 trillion which should underpin infrastructure renewal, green energy, and investments in other industries across the sector.
“However, the aerospace & defense industry, which is not the top allocation of XLI, appears to benefit the most due to the favorable tailwinds,” the analyst added.
Morgan Stanley, while estimating the S&P 500 base next-twelve-months price target to be 4,500, remained neutral on industrials, energy, and financials compared to overweight on healthcare, consumer staples, and utilities.
What Quantitative Measures Say
Seeking Alpha’s Quant Ratings recommended the ETF as a Buy, rating it 4.09 out of 5. The ETF was graded an A- on dividends compared to an A three months ago. Its momentum and liquidity prospects were graded an A- and an A+, respectively.
