Industrial Select Sector SPDR Fund (XLI)

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. The industrial sector should see growth from global economic growth and increased government spending on infrastructure. Buyable at these levels. Unlock Premium - Try 5i Free

Industrial US ETF? In the US industrial sector he sees it as being a tough place to be lately. He would look at some of the BMO family of ETFs. You have to be careful that you are not too concentrated (ie. Boeing). He has owned XLI. He has a neutral view on the space and would probably wait.

SPDR Industrial (XLI-N) or SPDR Technology (XLK-N)? He likes the industrial space and the technology area as well. If you are asking for a very timely standpoint, technology came down a little in the last week or so, so he would probably buy XLK-N right now. He wouldn’t necessarily buy this one just for tax reform and corporate tax cuts. That’s something which would help earnings, and will certainly help a lot of industrial names.

This has some of his favourite stuff in it, such as defence stocks, plus a lot of industrial stuff.

(A Top Pick Oct 27/16. Up 12.15%.) Chart shows a consolidation phase running from April through to October inclusive, then getting hit with the Trump Bump. It has run up a lot. Structurally he still thinks it is good. The next seasonal period goes from January 23 to May 5. If it becomes a little bit weaker, who consider exiting, and look for it to come back in the 2^nd seasonal period.

Manufacturing in the US tends to do well from Oct 28 until the end of the year. It is up 7% average in that time. It outperforms the S&P 78% of the time. It is setting up a case for a positive breakout possibly until the end of May.

SPDR Technology (XLK-N) or SPDR Industrial (XLI-N)? If you are going to invest primarily in seasonals, you want to be more into industrials rather than technology. Industrials enter this next leg of period of seasonal strength from about mid January all the way to May. Charts are showing higher highs and higher lows. His preference would be this one.

(A Top Pick Oct 28/14. Up 5.75%.) Picked this up Oct 27 and just recently sold it, because the industrial sector can have a little bit of weakness in January. However, it has another seasonal period coming up Jan 23 to May 5.

This never really blows away the S&P 500, but it beats it on enough of a basis that it makes sense to do a trade. Typically you would get in now and hold it until at least the end of the year. From October 28th to the end of the year, it is up about 88% of the time, and has produced a 6% average return from 1990 to 2013.