Utilities

Why invest in Utilities

Utility sector companies are the engaged in production and distribution of goods and services which are essential to modern day living like gas, electricity, water etc. These companies are usually characterized as dividend paying and are recession proof, hence the name defensive companies. Due to capital intensive nature of business they have high debt burden. The sector is affected by governmental regulations and has a low growth potential.

Key indicators to consider before investing

  • Interest Rate
  • Business Cycle

Top 5 ETF’s  by Market Capitalization

Name of the Fund Ticker Symbol /Total AUM* Year of Inception Expense Ratio
 Utilities SPDR  XLU  12/16/1998 0.14%
 Vanguard Utilities   VPU  01/26/2004 0.10%
 First Trust Utilities AlphaDex Fund  FXU  05/08/2007  0.62%
 iShares Dow Jones US Utilities  IDU  06/12/2000  0.44%
 Guggenheim S&P 500 Equal Weight Utilities  RYU  11/01/2006 0.40%

 

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