Quick Read – PAVE beat XLI 131% to 93% over five years by concentrating on the electrical and construction companies powering AI’s physical build-out. – Data centers could consume 12% of U.S. electrical demand by 2028, while a 40-year-old power grid forces infrastructure capex…
accelerate. – PAVE’s narrower focus cut 4% in a week versus XLI’s 2% drop, so a partial reallocation beats a full swap for most holders. – The Industrial Select Sector SPDR Fund (NYSEARCA:XLI) is the default way most investors own U.S. industrials. It holds the industrial names in the S&P 500, providing broad exposure to aerospace, machinery, railroads, and defense at a low cost
XLI has done its job over the last year, returning 24.05% through July 7, 2026. The trouble is that a large share of the industrial rally has been driven by one narrow theme, and XLI dilutes it. A more concentrated infrastructure fund captured a larger share of the same wave.
Why XLI Still Makes Sense for Most Holders XLI is cap-weighted across S&P 500 industrials, meaning its top 10 holdings account for 41.00% of assets, led by Caterpillar at 7.74%, GE Aerospace at 6.85%, and GE Vernova at 5.37%. The fund holds 84 positions across transportation, defense, and manufacturing, with $31.07 billion in assets. That breadth is why people buy it.