Industrial Select Sector SPDR Fund (XLI): Complete Beginner's Guide
Last updated: March 2026 • State Street Global Advisors • Industrials Sector
Expense Ratio
0.09%
AUM
$19.0B
Dividend Yield
1.40%
Inception
1998
Beginner Score
8/10
What is Industrial Select Sector SPDR Fund?
XLI provides exposure to the industrial sector of the S&P 500, including aerospace and defense, machinery, railroads, construction, and business services companies. Industrials are considered cyclical because their profits are closely tied to economic growth and infrastructure spending. Beginners should know that XLI tends to outperform during economic expansions but can underperform when growth slows.
XLI is managed by State Street Global Advisors and has been available since 1998. With $19.0B in assets under management, it's a well-established fund with strong institutional backing. The fund charges an expense ratio of 0.09%, which means for every $10,000 you invest, you pay approximately $9 per year in management fees.
XLI at a Glance — Key Metrics
| Expense Ratio | 0.09% |
| Total Holdings | 78 |
| P/E Ratio | 23.8 |
| Beta | 1.05 |
| Dividend Yield | 1.40% |
| AUM | $19.0B |
| Inception Year | 1998 |
| Issuer | State Street Global Advisors |
Top 10 Holdings in XLI
XLI holds 78 different securities. Here are the largest positions that make up the core of this fund:
| # | Company | Ticker | Weight |
|---|---|---|---|
| 1 | GE Aerospace | GE | 5.20% |
| 2 | Caterpillar Inc. | CAT | 4.80% |
| 3 | RTX Corp. | RTX | 4.50% |
| 4 | Honeywell International | HON | 4.20% |
| 5 | Union Pacific Corp. | UNP | 4.00% |
| 6 | Boeing Co. | BA | 3.80% |
| 7 | Lockheed Martin Corp. | LMT | 3.50% |
| 8 | Deere & Co. | DE | 3.20% |
| 9 | Uber Technologies Inc. | UBER | 3.00% |
| 10 | Illinois Tool Works Inc. | ITW | 2.80% |
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XLI Performance History
Here's how XLI has performed over different time periods. Remember that past performance doesn't guarantee future results, but it gives you a sense of the fund's track record:
YTD
2.40%
1 Year
21.50%
3 Year
10.50%
5 Year
11.80%
10 Year
10.80%
Beginner Suitability Score: 8/10
Our proprietary Beginner Suitability Score evaluates ETFs based on five factors that matter most to new investors: fees, volatility, diversification, dividend history, and track record length.
XLI scores 8/10 because it has very low fees, can be more volatile than the broader market, focuses on 78 selected holdings, and has been available since 1998, giving it a proven track record.
How to Buy XLI — Step by Step
- Open a brokerage account — We recommend Fidelity, Charles Schwab, or Vanguard for ETF investing. All offer $0 commissions on ETF trades.
- Fund your account — Transfer money from your bank. You can start with as little as $1 if your broker offers fractional shares.
- Search for "XLI" — Use the search bar in your brokerage platform to find Industrial Select Sector SPDR Fund.
- Place your order — Choose "Market Order" for simplicity or "Limit Order" if you want to set a specific price. Enter how many shares (or dollar amount) you want to buy.
- Set up automatic investing — Most brokers let you schedule recurring purchases (e.g., $100/month on the 1st). This is dollar cost averaging in action.
Dollar Cost Averaging Into XLI
Here's what consistent monthly investing could look like over time, assuming an average annual return of 8% (approximate historical stock market average):
| Monthly | 10 Years | 20 Years | 30 Years |
|---|---|---|---|
| $100/mo | $18,417 | $59,295 | $150,030 |
| $250/mo | $46,041 | $148,237 | $375,074 |
| $500/mo | $92,083 | $296,474 | $750,148 |
*Projections assume 8% average annual return with monthly compounding. Actual returns will vary. Past performance doesn't guarantee future results.
Fee impact: With XLI's expense ratio of 0.09%, a $10,000 investment would lose approximately $771 to fees over 20 years compared to a zero-fee investment. This is a reasonable fee level for the value provided.
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Pros and Cons of XLI
Pros
- ✓Broad exposure to 78 industrial companies spanning aerospace, railroads, machinery, and more
- ✓Benefits from infrastructure spending, reshoring trends, and defense budget increases
- ✓Low 0.09% expense ratio for targeted access to the full S&P 500 industrials sector
- ✓Historically strong returns during periods of economic recovery and expansion
Cons
- ✗Cyclical nature means industrials suffer during economic slowdowns and recessions
- ✗Lower dividend yield than defensive sectors like utilities or consumer staples
- ✗Global trade tensions and tariffs can negatively impact many industrial companies
XLI vs Similar ETFs
See how XLI stacks up against similar funds:
Frequently Asked Questions
Is XLI a good ETF for beginners?▾
XLI has a Beginner Suitability Score of 8/10 on our scale. This makes it a strong choice for new investors due to its low fees and focused strategy.
What is the expense ratio of XLI?▾
XLI has an expense ratio of 0.09%. This means for every $10,000 you invest, you pay approximately $9 per year in fees. This is considered very low and cost-efficient.
How much money do I need to invest in XLI?▾
You can invest in XLI with as little as $1 through brokers that offer fractional shares (like Fidelity, Schwab, or Robinhood). There is no minimum investment required beyond the share price itself, which changes daily. Dollar cost averaging — investing a fixed amount regularly — is a popular strategy.
Does XLI pay dividends?▾
Yes, XLI pays dividends with a current yield of approximately 1.40%. Dividends are typically paid quarterly and can be reinvested automatically through most brokers.
What are the top holdings in XLI?▾
The top holdings in XLI include GE Aerospace (5.20%), Caterpillar Inc. (4.80%), RTX Corp. (4.50%), and more. The fund holds 78 total positions, providing focused exposure to selected companies.