Within each category we filter them by placing importance on high assets under management, liquidity and/or strategies that make a difference the most critical tests. Newer issues tied to new indexes with long (over 5 years) of historical data may be worth investigating, featuring and using as a replacement if necessary.
As demographics in the developed world change with aging populations, the demand for income increases while risk avoidance increases. At the same time, many investors understand the need for growth continues given the potential for inflation. Keeping a portion of a portfolio in common stocks among other sector allocations is important; however, adding yield through dividends can help achieve the dual goal.
Remember just searching for the highest dividend yields can lead to troubled sectors where the ability to maintain the dividend is questionable.
XLU (SPDR Utilities Sector ETF) follows the Utilities Select Sector Index. This sector remains the historical first choice for investors seeking stable dividend income with the potential for long-term growth in value and increases in dividends. The fund was launched December 1998. The expense ratio is .20% AUM (Assets under Management) equal $6.2 billion and average daily trading volume is les than 10M shares. As of mid-September 2011 the annual dividend is $.69 making the current yield is 3.90% and YTD performance 8.42%.
Data as of September 2011
XLU Top Ten Holdings & Weightings
- Southern Co (SO): 8.58%
- Exelon Corp (EXC): 6.98%
- Dominion Resources Inc (D): 6.86%
- NextEra Energy Inc (NEE): 5.85%
- Duke Energy Corporation (DUK): 5.67%
- American Electric Power Co Inc (AEP): 4.57%
- FirstEnergy Corp (FE): 4.52%
- Public Service Enterprise Group Inc (PEG): 4.22%
- PG&E Corp (PCG): 4.14%
- PPL Corp (PPL): 4.09%