The Utilities Select Sector SPDR Fund (XLU) provides exposure to the utility sector in the United States. The fund uses a replication strategy to track the performance of the Utilities Select Sector Index.
Securities from companies in the gas utilities, water utilities, independent power producers, multi-utilities, and utilities for the production of renewable and independent power are included in the index. The five-year monthly beta for XLU is 0.54, reflecting its lower volatility compared to the broader market.
In a recessionary environment, the utility sector provides a solid hedge to one’s investment portfolio. In addition, this highly regulated sector is known for its low volatility in terms of financials.
XLU has gained 12.6% over the past year and 10.2% over the past nine months to close its last trading session at $74.75. In addition, it is currently trading only 4.4% below its 52-week high of $78.22.
Here are the factors that could affect XLU’s performance in the near term:
Fund Stats
XLU has $18.13 billion in assets under management and a NAV of $76.66. Its gross expense ratio of 0.10% is significantly lower than the category average of 0.43%. The fund has a net flow of $3.12 billion over the past year and $804.54 million over the past month.
Top Holdings
3 STOCKS TO DOUBLE THIS YEAR
The fund’s top holdings include NextEra Energy Inc. (NEE) with a 17.2% weight, Duke Energy Corp. (DUK) with an 8.4% weight, Southern Co (SO) with a 7.3% weight, Dominion Energy Inc. (D) with a 6.6% weight, and the Exelon Corp (EXC) with a 5% weight.
Attractive Dividend
XLU’s annual dividend of $1.98 yields 2.96% on prevailing prices. Its dividend payouts have increased at a 3.6% CAGR over the past five years. The fund has a record of…
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