Utilities is one of the most maligned sectors in the S&P 500. Maligned in that no one really seems to ever pay it much attention. At least not when things are swinging. With the S&P 500 up over 25 percent this year, who gives a fig about utilities? There are sexy tech stocks to invest in, biotech’s too. All sorts of stocks that might take off like rockets.
But you’ll be back. Ohh, boy you’ll be back. The day will come when the markets are tanking, a long bearish winter when you’ll pray for the sweet, warm embrace of stable utilities. When the limited returns of utility companies are no real issue in the face of plunging share prices everywhere else. At that point, you’ll be happy for that decent dividend and stable share price.
And before pride becomes the fall, right? The S&P 500 is up almost 150 percent since reaching a bottom in March of 2009. Sooner or later, this equities run has to come to and end, right? Well, not necessarily, but odds are there’s a bear market coming down the road at some point. And when that day comes, you should know what utilities ETFs are out there to warm your feet next to. After all, people will always need utilities.
SPDR Utilities Select Sector Fund ($XLU)
Dividend yield: 3.75 percent
Tracking the Utilities Select Sector Index, the SPDR Utilities fund is the most commonly traded utilities ETF. Its average volume approaches 12 million shares a day, with no other utilities ETF exceeding half a million.
First Trust Utilities AlphaDEX ($FXU)
Dividend yield: 4.42 percent
Tracks the StrataQuant® Utilities Index.
iShares Dow Jones US Utilities Sector Index Fund ($IDU)
Dividend yield: 3.14 percent
Tracks the utilities sub-index of the Dow Jones.
SPDR S&P International Utilities Sector ETF ($IPU)
Dividend yield: 3.93 percent
Stepping away from the United States, the SPDR International Utilities ETF tracks the S&P Developed Ex-U.S. BMI Utilities Sector Index, which is composed of utilities companies from developed economies.
iShares S&P Emerging Market Infrastructure ETF ($EMIF)
Dividend yield: 3.11 percent
EMIF tracks the S&P Emerging Markets Infrastructure Index and is made up of utilities from emerging economies.