Should You Invest in the iShares U.S. Industrials ETF (IYJ)?

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.

While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.

Additionally, sector ETFs offer convenient 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 11, placing it in bottom 31%.

Index Details

The fund is sponsored by Blackrock. It has amassed assets over $1.60 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

Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.

Annual operating expenses for this ETF are 0.39%, making it one of the cheaper products in the space.

It has a 12-month trailing dividend yield of 0.86%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.

This ETF has heaviest allocation in the Industrials sector--about 63.60% of the portfolio. Financials and Materials round out the top three.

Looking at individual holdings, Visa Inc Class A (V) accounts for about 9.11% of total assets, followed by Mastercard Inc Class A (MA) and Ge Aerospace (GE).

The top 10 holdings account for about 35.77% of total assets under management.

Performance and Risk

The ETF has added about 5.82% and was up about 17.70% so far this year and in the past one year (as of 06/10/2025), respectively. IYJ has traded between $115.07 and $143.93 during this last 52-week period.

The ETF has a beta of 1.10 and standard deviation of 18.26% for the trailing three-year period, making it a medium risk choice in the space. With about 194 holdings, it effectively diversifies company-specific risk.

Alternatives

IShares U.S. Industrials ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, IYJ is a sufficient option for those seeking exposure to the Industrials ETFs area of the market. Investors might also want to consider some other ETF options in the space.

Vanguard Industrials ETF (VIS) tracks MSCI US Investable Market Industrials 25/50 Index and the Industrial Select Sector SPDR ETF (XLI) tracks Industrial Select Sector Index. Vanguard Industrials ETF has $5.60 billion in assets, Industrial Select Sector SPDR ETF has $21.48 billion. VIS has an expense ratio of 0.09% and XLI charges 0.08%.

Bottom Line

To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.

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This article originally published on Zacks Investment Research (zacks.com).

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