Will Utilities Keep Shining?
Source: The Motley Fool (5/13/08)
The utility sector might seem dull compared to many other areas of the market. But utility stocks often have decent yields and low volatility, and they offer safe haven when markets are roiled.
For investors interested in capitalizing on increased demand for basic utilities, there are a number of ETFs that own utility stocks. Of the dozen or so utility ETFs available today, three have been around for a little more than eight years. These funds yield just less than 3%, providing a steady if not spectacular yield. A closer look at these three funds, which have low fees and some of the highest long-term returns, should help you choose the best one for your particular needs.
Although the three funds each track different indexes of utility stocks, they include many of the same stocks. The Utilities Select Sector SPDR (AMEX: XLU), for instance, tracks the Utilities Select Sector Index, which includes companies from the electric utility, multi-utility, independent power production, energy trading, and gas utility industries.