Generated October 17, 2026.
Overview
VIS and XLI both track industrials exposure through large-cap U.S. stock indexes, but they differ materially in scope and index construction. The two ETFs are issued by Vanguard and State Street respectively and have held industrials mandates for two decades or more.
How they differ
The biggest difference is index coverage. XLI draws only from the S&P 500, while VIS pulls from the broader MSCI US Investable Market, which encompasses large-, mid-, and small-cap industrials. That structural choice means XLI will hold fewer positions and concentrate more weight in the largest industrial firms; VIS will have wider industry and market-cap reach.
Second, VIS carries a higher beta of 1.12 versus 1.01 for XLI, a reflection of its smaller-cap tilt.
Third, XLI is cheaper on expense ratio at 0.08% versus 0.09%, though the difference is negligible (0.01%). XLI is also substantially larger by assets, with $30.5B under management against $8.02B for VIS.
Who each is best for
- VIS: Investors seeking a broad, market-cap-weighted basket of industrials firms across the capitalization spectrum, including mid and small-cap exposure alongside large-cap names. Fits allocators who want industrials but don't want to be overweight mega-cap winners.
- XLI: Investors who want industrials exposure anchored to the S&P 500's largest industrial constituents. Designed for core equity allocators building from the index's largest, most-traded stocks, or those seeking exposure concentrated in a flagship benchmark's sector selection.
Key risks to know
- Index composition: VIS and XLI may hold overlapping positions in large-cap industrials, but VIS's mid- and small-cap holdings will likely differ from XLI's S&P 500-only roster. Verifying actual position overlap is important if considering both funds.
- Beta divergence: VIS's higher beta of 1.12 versus 1.01 means it will amplify industrials sector moves more sharply in both directions. In a downturn, VIS may fall further than XLI; in rallies, the reverse applies.
- Sector concentration: Both indexes isolate industrials as a single sector. If industrials underperform or face prolonged headwinds—supply-chain stress, commodity cycles, capital intensity—the sector tilt will magnify losses relative to a broad market index.
Bottom line
If you want broad industrials exposure across the full market-cap spectrum, VIS's structure supports that; if you prefer to stay within S&P 500 industrials with lower cost and larger assets under management, XLI's design accommodates that choice. The yield difference is modest and the expense ratio gap immaterial. Past performance does not predict future results.
AI-generated analysis for educational purposes only. Verify important details independently; past performance does not guarantee future results.
