Vanguard Industrials ETF
If you’re looking to add a wide swath of industrial might to a portfolio, skipping the more popular Industrial Select Sector SPDR (XLI) and going with the Vanguard Industrials ETF (VIS) could be the best choice. Unlike the more concentrated XLI, the Vanguard Industrials features a wider range of industrial firms in its portfolio.
Tracking the MSCI US Investable Market Industrials 25/50 Index, VIS spreads its $1.6 billion in assets among 348 different industrial firms — including stalwarts like 3M (MMM) and Emerson Electric (EMR). That’s versus just 64 stocks for the XLI. That broader focus — which includes mid- and small-cap industrial firms — has helped the VIS outperform the XLI by roughly 2% during 2013 and has given it a slight edge over the popular ETF over longer time periods.
Also adding to those returns is Vanguard’s commitment to low-cost investing. VIS once again beats the XLI — this time on the cost front.
VIS only costs 0.14% — or $14 per $10,000 to own. That compares to the 0.18% for the SPDR. Over long periods of time, costs do add up and zap returns. Add in VIS’s slightly higher dividend yield and winner for investors is clearly the Vanguard ETF.