4 Global Industrial ETFs to Consider Now
Ah, yes. Industrial stocks. Not as sexy as a tech company, not as boring as a utility. Actually, the industrial sector is more interesting than it seems as it's home to an array of companies ranging from Dow components Caterpillar (NYSE: CAT) and General Electric (NYSE: GE) to UPS (NYSE: UPS) and Union Pacific (NYSE: UNP).
That means the industrial sector is a great way to check the pulse of the U.S. economy and if you want to do that, then consider an ETF like the Industrial Select Sector SPDR (NYSE: XLI).
However, this is a global economy we live and the smart investors are the ones that are doing temperature checks beyond U.S. borders. If you're so inclined, we offer up four international industrial ETFs that merit a look right now.
EGShares Industrials GEMS ETF (NYSE: IGEM) We previously mentioned the EGShares Industrials GEMS ETF as one industrial ETF to keep an eye on. For the investor looking to make a bet on a rebound in emerging market industrials, IGEM is the ticket. That said, there are a couple of issues to consider. The expense ratio of 0.85% is a tad high and investors need to know what they're getting.
With IGEM, that means a 23.4% allocation to industrial engineering and almost 63% exposure to India and China. All that said, IGEM might be a buy above $16.50.
Global X China Industrials ETF (NYSE: CHII) Quiet as it may be kept, the Global X China Industrials ETF was up almost 6% on Tuesday and that gain means the ETF is now positive in 2012. Actually, CHII has jumped more than 14% in the past three months and for those that want to roll the dice on more economic excellence from China, this one ETF to do that with. If CHII can take out resistance at $12, the upside potential from there is quite strong.
SPDR S&P International Industrial Sector ETF (NYSE: IPN) Haven't heard of the SPDR S&P International Industrial Sector ETF? Don't worry, you're not alone. The ETF will celebrate its fourth birthday in July, but currently has less than $13 million in assets under management. While IPN is decidedly developed market in its global bias (Japan represents almost a third of the country allocation), investors still need to do their homework on this ETF.
Euro Zone nations account for over 21% of IPN's weight and that includes all of the PIIGS. IPN hasn't rallied as hard as IGEM or CHII recently, but the ETF's downside is contained to $20-$21.
iShares S&P Emerging Markets Infrastructure ETF (Nasdaq: EMIF) OK, this an infrastructure ETF, not specifically an industrial ETF, but it's a thin line as infrastructure companies are arguably industrial firms as well. EMIF shares a couple of things in common with IGEM such as a high expense ratio (0.75% in this case) and heavy China exposure (28.5%). Overall, Brazil, China and Chile account for two-thirds of this ETFs and EMIF does offer 5.55% exposure to the Czech Republic, currently one of the larger ETF allocations to that country.
Home to 27 stocks and a yield over 3.2%, EMIF is a good way to play rebounds in China and Brazil without buying ETFs devoted exclusively to those countries.
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