Designed to provide broad exposure to the Industrials - Broad segment of the equity market, the iShares U.S. Industrials ETF (IYJ) is a passively managed exchange traded fund launched on 06/12/2000.
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
Sector ETFs are also funds of convenience, offering many ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Industrials - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 8, placing it in top 50%.
Index Details
The fund is sponsored by Blackrock. It has amassed assets over $1.10 billion, making it one of the larger ETFs attempting to match the performance of the Industrials - Broad segment of the equity market. IYJ seeks to match the performance of the Dow Jones U.S. Industrials Index before fees and expenses.
The Russell 1000 Industrials 40 Act 15/22.5 Daily Capped Index measures the performance of the industrial sector of the U.S. equity market. It includes: construction & materials, aerospace & defense, general industrials, electronic & electrical equipment, industrial engineering, industrial transportation & support services. The Index is capitalization-weighted.
Costs
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for this ETF are 0.41%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 1.04%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Industrials sector--about 58.60% of the portfolio. Information Technology and Materials round out the top three.
Looking at individual holdings, Visa Inc Class A (V) accounts for about 7.19% of total assets, followed by Mastercard Inc Class A (MA) and Accenture Plc Class A (ACN).
The top 10 holdings account for about 35.25% of total assets under management.
Performance and Risk
Year-to-date, the iShares U.S. Industrials ETF has lost about -19.70% so far, and is down about -19.10% over the last 12 months (as of 07/08/2022). IYJ has traded between $86.15 and $114.98 in this past 52-week period.