ETF Talk: Veni Vidi Vici with This ETF

Much like in the time of Julius Caesar, the tides are changing — and while this has not been a swift and victorious battle, it has been a victorious battle nonetheless, and the market serves as evidence of such.

The victory here is in the numbers — with the three major market indexes hitting record highs. While Donald Trump may be a salacious subject on the whole, as a businessman and as POTUS, he is the embodiment of the American economy — and while many love to hate him, his agenda, which includes tax cuts and deregulation, can be viewed as positive for the economy.

Renewed consumer sentiment, in tandem with holiday shopping, equals money flowing into all sectors of the market — especially consumer goods, which cannot be produced or delivered without the help of two sectors: Capital Goods and Transportation — both of which are captured in the Vanguard Industrials Exchange-Traded Fund (VIS).

It is a widely held belief that the industrial sector can be seen as the backbone of the American economy, and with Trump’s belief in American output and manufacturing, this sector is likely to go much higher.

The Vanguard Industrials offers exposure to the U.S. industrials sector and allows investors access to areas of the economy that include transportation firms, providers of commercial and professional services and manufacturers of capital goods. Moreover, the ETF is unique because it includes hundreds of individual holdings — none of which make up more than 4% of the fund.

The fund has $5.92 billion in net assets and $6.05 billion in assets under management. Aside from its strong assets, it also offers a dividend yield of 1.07% and an annual dividend of $3.00 along with a tantalizing expense ratio of 0.10%.

Courtesy of stockcharts.com

VIS came, saw and conquered — and there is no denying that. The chart above shows what a strong ETF looks like, and there is no denying Trump’s role in it either. Though there was a slight dip in the first days of November, it was nothing compared to the battle cry of an all-time high in its daily price point — landing close to $280. While VIS is slightly lower today, at $278.58, it is still seeing good movement and renewed cash flow.

The fund’s top 10 holdings include GE Aerospace (GE), 3.47%; Caterpillar Inc. (CAT), 3.39%; RTX Corporation (RTX), 2.96%; Union Pacific Corporation (UNP), 2.61%; Uber Technologies, Inc. (UBER), 2.50%; Honeywell International Inc. (HON), 2.47%; Eaton Corporation plc (ETN), 2.44%; Automatic Data Processing, Inc. (ADP), 2.18%; Lockheed Martin Corporation (LMT), 2.17% and The Boeing Company (BA), 2.00%.

Overall, VIS offers investors access to the industrial sector while also showing a strong balance between growth and value. Interested investors may want to start looking into the fund as it continues to gain strength. Ultimately, industrials as a whole are part of the victory that we are seeing. With the fund’s multitude of holdings, strong assets and low expense ratio, it may be a holiday play that is worth considering.

In light of a rather long economic and political battle, I will end with a fitting quote from the renowned Winston Churchill: “Victory at all costs, victory in spite of all terror, victory however long and hard the road may be; for without victory, there is no survival.”

As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an email. You just may see your question answered in a future ETF Talk.