iShares Global Industrials ETF

EXI

Market cap $1.24B

The industrials sector is deeply overvalued, except for the transportation industry. iShares Global Industrials ETF offers international diversification, lower company risk, and stronger fundamentals compared to XLI.

The industrial sector remains overvalued overall, but the transportation subsector is moderately undervalued. The iShares Global Industrials ETF offers international exposure with lower company risk and stronger value metrics compared to the U.S.-focused XLI. While EXI has underperformed XLI since 2006, partly due to currency headwinds, it has outperformed over the past year with similar risk metrics.

This article provides a top-down analysis of the industrial sector based on valuation, quality, and momentum. Industrials remain broadly overvalued, with transportation as the only undervalued subsector; aerospace/defense is the most overpriced. EXI offers global exposure and less concentration risk than XLI, but has underperformed, partly due to currency headwinds.

As tariff tensions ease and investor sentiment improves, global ETFs like ACWI are poised for a rally.

During 2023, the higher rate environment was a source of competition for the equity income category.