TRUI targets the industrials sector with a twist — it uses a proprietary 'TruSector' methodology that aims to capture companies with genuine industrial operations rather than just those classified as industrials by traditional sector definitions. This approach seeks to avoid misclassified companies that have drifted from their original business models.
How It Works
The fund employs VanEck's TruSector classification system, which analyzes actual revenue sources rather than relying on standard GICS classifications. It equal-weights holdings within subsectors to avoid concentration in mega-caps like Boeing or Honeywell. The methodology rebalances quarterly and screens for companies deriving at least 50% of revenues from industrial activities, excluding conglomerates that have become financials or tech companies in disguise.
Key Features
- Revenue-based classification catches true industrials missed by GICS, like certain logistics tech firms
- Equal-weighting within subsectors provides broader exposure than cap-weighted industrial ETFs dominated by aerospace giants
- Zero expense ratio makes it cheaper than XLI (0.09%) while offering differentiated exposure
Risks
- New fund with no track record — the TruSector methodology is unproven and could underperform traditional approaches
- Industrial sector correlation to economic cycles means 20-30% drawdowns possible in recessions
- Equal-weighting within subsectors may overweight smaller, less liquid names that could gap down in selloffs
Who Should Own This
Best suited for investors who believe traditional sector classifications are broken and want industrial exposure without the top-heavy concentration in defense contractors and legacy conglomerates. Works as a sector rotation tool for those timing economic cycles or as a long-term holding for believers in reshoring and infrastructure spending. The zero expense ratio makes it particularly attractive for buy-and-hold investors willing to bet on VanEck's classification methodology.