Two ETFs To Benefit From A Strong ISM (XLI, IYJ)

The ISM was released this morning for the month of October, and it came in better than expected, at a reading of 56.9. This was far higher than the 54.4 economists had expected. Any reading above 50.0 indicates expansion, and there are a couple of ETFs that will benefit from a strong manufacturing sector. Industrial SPDR ETF XLI is a play on the industrial sector, and counts companies like Caterpillar CAT, Boeing BA and 3M MMM among its top holdings. This sector is important because it's vital to the health of an economy to have companies which actually make "things", and these are some of the largest makers of goods in the world. It has $3.1 billion in assets under management, and has a 0.22% expense ratio. It also yields 1.9%. iShares Dow Jones U.S. Industrial ETFIYJ is another ETF that plays on a strong industrial sector. This ETF is less liquid than the XLI, and has just over $325 million in assets. It has some of the same holdings as the XLI, such as Caterpillar, Boeing, and General Electric GE. It has a yield of 1.4% Risks to these ETFs include a slowing of the global economy, as well as company specific risks, like bankruptcies, management changes, or other serious events.