This Fund Could Give Investors Utility

Doug Fabian

Doug Fabian is known for his expert knowledge of ETFs, bear funds and enhanced index funds to profit in any market climate.

Last but not least in our series on the sector-specific exchange-traded funds (ETFs) offered by SPDR is SPDR Select Sector Utilities ETF (XLU). The utilities sector of the S&P 500, where this fund focuses, includes companies involved in electric utilities, gas utilities, energy traders and similar businesses.

View the current price, volume, performance and top 10 holdings of XLU at

More than most industries, utilities companies tend to carry large debt loads. As a result, interest rates impact them more heavily. Due partly to this situation, the sector has experienced some turmoil this year. XLU also may experience more ups and downs than other sector funds due to investing in fewer companies.

So far this year, XLU has underperformed the S&P 500 greatly as fears of a Fed rate hike likely hurt investor sentiment towards utilities. The fund is down 9.76% in 2015. It does, however, pay a higher yield, 3.5%, than most sector funds and it has about the same low expense ratio, 0.14%, as its peers. XLU has about $5.6 billion in assets under management.


This fund invests 59.8% of its assets in its top 10 holdings, making it less diversified than many other ETFs. The largest holdings are NextEra Energy Inc. (NEE), 8.78%; Duke Energy Corp. (DUK), 8.34%; Southern Co. (SOJA), 7.90%; Dominion Resources Inc. (D), 7.52%; and American Electric Power Company Inc. (AEP), 5.29%.

People always will spend money on utilities. When that stability is again reflected by investment in the utilities sector, SPDR Select Sector Utilities ETF (XLU) may be worth a look.

I’ll highlight another fund for your consideration next week,.

Remember to look for the current price, volume, performance and top 10 holdings of XLU at

If you want my advice about buying and selling specific ETFs, including appropriate exit points, please consider subscribing to my Successful ETF Investing newsletter.

As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an e-mail. You just may see your question answered in a future ETF Talk.

In case you missed it, I encourage you to read my e-letter column from last week about a consumer-based ETF. I also invite you to comment in the space provided below.

previous article

Investment trend expert Chris Versace analyzes changes in the music and video industries to show how their corresponding technologies can change as well.


Dr. Mark Skousen

Named one of the "Top 20 Living Economists," Dr. Skousen is a professional economist, investment expert, university professor, and author of more than 25 books.

Product Details

  • Forecasts & Strategies
  • Home Run Trader
  • Fast Money Alert
  • Five Star Trader
  • TNT Trader

Bryan Perry

A former Wall Street financial advisor with three decades' experience, Bryan Perry focuses his efforts on high-yield income investing and quick-hitting options plays.

Product Details

  • Cash Machine
  • Premium Income (exclusively for subscribers of Cash Machine)
  • Quick Income Trader
  • Breakout Profits Alert
  • Hi-Tech Trader

Jim Woods

Jim Woods has over 20 years of experience in the markets from working as a stockbroker,
financial journalist, and money manager. As well as a book author and regular contributor to
numerous investment websites, Jim is the editor of:

Product Details

  • Successful Investing
  • Intelligence Report
  • Bullseye Stock Trader

Bob Carlson

Bob Carlson provides independent, objective research covering all the financial issues of retirement and retirement planning. In addition, Bob serves as Chairman of the Board of Trustees of the Fairfax County (VA) Employees’ Retirement System, which has over $2.8 billion in assets.

Product Details

  • Retirement Watch
  • Retirement Watch Spotlight Series
  • Lifetime Retirement Protection Program

Hilary Kramer

Hilary Kramer is an investment analyst and portfolio manager with 30 years of experience on Wall Street. Since 2010, Hilary's financial publications have provided stock analysis and investment advice to her subscribers:

Product Details

  • GameChangers
  • Value Authority
  • High Octane Trader
  • Triple-Digit Trader
  • 2-Day Trader
  • IPO Edge
  • Inner Circle

Jon Johnson

Jon Johnson's philosophy in investing and trading is to take what the market gives you regardless if that is to the upside or downside. For the past 21 years, Jon has helped thousands of clients gain success in the financial markets through his newsletters and education services:

Product Details

  • Investment House Daily
  • Technical Traders Alert
  • Success Trading Group

Used by financial advisors and individual investors all over the world, is the premier provider and one-stop shop for dividend information and research.

Product Details

Popular tools include our proprietary Dividend Calendar, Dividend Calculator, Dividend Score Card, and many more.

  • Dividend Investor