Investing in companies operating in the utilities industry is a preferred option for income investors. Such companies are known for reliable dividend payments, having negative correlations to interest rates, and carrying moderate risk levels.
Investors can choose to invest in individual utility stocks, or another option could be investing in exchange-traded funds (ETFs) that offer exposure to a basket of utility stocks. Let’s take a look at the ten best-performing utilities ETFs.
We have used the last one-year return data of the utilities ETFs (from money.usnews.com) to rank the ten best-performing Utilities ETFs.
Invesco DWA Utilities Momentum ETF (PUI, 12%)
Invesco DWA Utilities Momentum ETF (NASDAQ:PUI) aims to track the investment performance of the Dorsey Wright® Utilities Technical Leaders Index. This ETF invests mainly in the securities that are part of the underlying index. PUI is up by almost 12% year to date.
It has more than $80 million in total assets and an expense ratio of 0.50. The top four holdings of this ETF are: Xcel Energy (NASDAQ:XEL), EQT Corp (NYSE:EQT), Sempra Energy (NYSE:SRE), and Constellation Energy Corp (NASDAQ:CEG).
iShares US Utilities ETF (IDU, 15%)
iShares U.S. Utilities ETF (NYSE:IDU) seeks to track the investment results of the Russell 1000 Utilities RIC 22.5/45 Capped Index, and thus, it mainly invests in the securities that are part of the index. IDU is up by almost 15% year to date.
It has more than $1 billion in total assets and an expense ratio of 0.48. The top four holdings of this ETF are: NextEra Energy (NYSE:NEE), Southern Company (NYSE:SO), Duke Energy (NYSE:DUK) and Waste Management (NYSE:WM).
Virtus Reaves Utilities ETF (UTES, 15%)
Virtus Reaves Utilities ETF (NYSE:UTES) mainly invests in the equity securities of companies that are part of the Utility Sector. UTES is up by almost 15% year to date.
It has more than $50 million in total assets and an expense ratio of 0.49. The top four holdings of this ETF are: NextEra Energy, Public Service Enterprise Group (NYSE:PEG), Entergy (NYSE:ETR), and Edison International (NYSE:EIX).
J. Hancock Multifactor Utilities ETF (JHMU, 15%)
John Hancock Multifactor Utilities ETF (NYSE:JHMU) seeks to offer investment results that are similar to the performance of the John Hancock Dimensional Utilities Index. This ETF typically invests in securities that are included in the index.
It has more than $20 million in total assets and an expense ratio of 0.38. The top four holdings of this ETF are: Consolidated Edison (NYSE:ED), Eversource Energy (NYSE:ES), Entergy, and Duke Energy.
Vanguard Utilities ETF (VPU, 15%)
Vanguard Utilities Index Fund ETF Shares (NYSE:VPU) uses an indexing investment approach to track the performance of the MSCI US Investable Market Index (IMI (LON:IMI))/Utilities 25/50. VPU is up by over 15% year to date.
It has more than $6 billion in total assets and an expense ratio of 0.09. The top four holdings of this ETF are Nextera Energy, Duke Energy Corporation, Southern Company, and Dominion Energy.
Fidelity® MSCI Utilities ETF (FUTY, 16%)
Fidelity® MSCI Utilities Index ETF (NYSE:FUTY) aims to offer returns that are in line with the performance of the MSCI USA IMI Utilities 25/50 Index. Thus, it mainly invests in securities that are part of the underlying index. FUTY is up by almost 5% year to date.
It has more than $2 billion in total assets and an expense ratio of 0.08. The top four holdings of this ETF are NextEra Energy, Southern Company, Duke Energy, and Dominion Energy.
Utilities Select Sector SPDR® ETF (XLU, 16%)
Utilities Select Sector SPDR® Fund (NYSE:XLU) uses a replication strategy to track and achieve the investment results that correspond to the equity securities of the companies in the Utilities Select Sector Index. XLU is up by over 5% year to date.
It has more than $17 billion in total assets and an expense ratio of 0.05. The top four holdings of this ETF are NextEra Energy, Southern Company, Duke Energy, and Dominion Energy.
First Trust Utilities AlphaDEX® ETF (FXU, 16%)
First Trust Utilities AlphaDEX® Fund (NYSE:FXU) aims to match the investment performance of an equity index called the StrataQuant® Utilities Index and primarily invests in the common stocks that are part of the index. FXU is up by over 6% year to date.
It has more than $470 million in total assets and an expense ratio of 0.50. The top four holdings of this ETF are: NRG Energy (NYSE:NRG), Waste Management, Republic Services (NYSE:RSG), and Vistra.
First Trust EIP Carbon Impact ETF (ECLN, 17%)
First Trust EIP Carbon Impact ETF (NYSE:ECLN) typically invests in the equity securities of companies that the fund's investment sub-advisor believes to have a positive carbon impact. ECLN is up by over 8% year to date.
It has more than $28 million in total assets and an expense ratio of 0.95. The top four holdings of this ETF are: Morgan Stanley (NYSE:MS) Instl Lqudty Trs Instl, Cheniere Energy (NYSE:LNG), DT Midstream, and Cheniere Energy Partners (NYSE:CQP) LP.
Invesco S&P 500® Equal Weight Utilities ETF (RYU, 17%)
Invesco S&P 500® Equal Weight Utilities ETF (NYSE:RYU) tracks the investment performance of the S&P 500® Equal Weight Utilities Plus Index and mainly invests in the securities that are part of this index. RYU is up by almost 8% year to date.
It has more than $450 million in total assets and an expense ratio of 0.40. The top four holdings of this ETF are Constellation Energy Corporation, FirstEnergy (NYSE:FE), NRG Energy, and Edison International.