Investors Just Made a Big Bet on Global Growth and a Soft Dollar

(Bloomberg) -- New year, same diet.

Investors are betting that two of 2017's most important and intertwined trends -- synchronized global growth and a weakening U.S. dollar -- will gather steam in 2018.

The Industrial Select SPDR Fund (ticker XLI) topped the U.S. equity exchange-traded fund leaderboard in the first week of the year, attracting $1.75 billion in inflows.

XLI hasn't received inflows this large since the week Donald Trump prevailed in the U.S. election, which spurred expectations that pro-growth proposals like infrastructure spending would be initiated before too long.

Industrials are considered to be a cyclical sector; that is, a segment of the market acutely sensitive to global economic activity. A weaker dollar tends to boost the prospects of exporters.

The ETF outperformed the S&P 500 Index in 2017, and includes the dog of the Dow Jones Industrial Average, General Electric Co.. It also has that gauge's top two standouts: Boeing Co. and Caterpillar Inc., which posted gains of 89 percent and 70 percent last year, respectively.

To contact the reporter on this story: Luke Kawa in New York at lkawa@bloomberg.net.

To contact the editors responsible for this story: Jeremy Herron at jherron8@bloomberg.net, Dave Liedtka, Joanna Ossinger

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