Broad coverage of the industrial goods sector reflects – perhaps inevitably – economic averages and the size of the industrial conglomerates – themselves quite diversified – may well explain performance aligned with the domestic US economy
Highlights of the theme are linked to industries correlated to global forces and less closely connected to domestic economic trends
- Geopolitical factors will – to a large degree – determine the performance (and volatility) of the Aerospace & Defense sector – and the 3 related funds have been catching up from poor performance since Nov. '20
- Automobile industries, covered by First Trust NASDAQ Global Auto Index Fund
are returning to favor, as the potential of the EV (electrical vehicles), buoyed by Tesla, is balanced by PHED hybrids in the legacy manufacturers' line-up and ...by mounting protectonism around the developed markets
Performance and volatility of funds invested in the entire US industrial sector (FIDU, XLI, VIS) can be expected to track economic forecasts while factor-based selections (multifactor JHMI or FXR, size and equalweighted RGI) are contingent on an investment model
The performance of Invesco's Industrials Momentum
The theme may assist the investor in the selection of the industrial fund in accordance with market perception and portfolio diversification
