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Top 10 Utilities ETFs

Our goal in this profile is to help investors wade through the many competing ETF offerings available. Using our long experience as an ETF publication, and nearly 40 years in the investment business, we can help select those ETFs that matter and may or may not be repetitive. The result is a more manageable list of issues from which to view and make selections.

There is currently an expanding list of 24 ETFs oriented to the utility and infrastructure sector with more on the way. The following analysis features a fair representation of ETFs available. We believe from these investors may choose an appropriate ETF to satisfy the best index-based offerings individuals and financial advisors may utilize.

Below is the methodology for ranking the ETFs within the category.

ETFs are based on indexes tied to well-known index providers including Russell, S&P, Barclays, MSCI, Dow Jones, Wisdom Tree, PowerShares, EG Shares and so forth. Also included are some so-called "enhanced" indexes that attempt to achieve better performance through more active management of the index.

ETFs are based on indexes tied to well-known index providers including Russell, S&P, Barclays, MSCI, Dow Jones and so forth. Also included are some so-called "enhanced" indexes that attempt to achieve better performance through more active management of the index.

Where competitive issues exist and/or repetitive issues available at a fee cost saving we mention those as other choices. New issues are coming to market consistently (especially globally) and sometimes these issues will need to become more seasoned before they may be included at least in our listings.

We feature a technical view of conditions from monthly chart views. Simplistically, we recommend longer-term investors stay on the right side of the 12 month simple moving average. When prices are above the moving average, stay long, and when below remain in cash or short. Premium members to the ETF Digest receive added signals when markets become extended such as DeMark triggers to exit overbought/oversold conditions.

For traders and investors wishing to hedge, leveraged and inverse issues are available to utilize from ProShares and Direxion and where available these are noted.

XLU (SPDR Utilities Sector ETF) follows the Utilities Select Sector Index covers most publicly traded U.S. utilities, multi-utilities, independent power producers & traders and gas utilities. The fund was launched in December 1998. The expense ratio is .20%. AUM (Assets under Management) equal $7 billion and average daily trading volume is 12M shares. As of early November 2011 the annual dividend yield was 4.02% 3.50% and YTD return 15.64%.

Inverse and leveraged issues are available from ProShares.

Data as of November 2011

XLU Top Ten Holdings & Weightings

  1. Southern Co (SO): 8.76%
  2. Exelon Corp (EXC): 6.95%
  3. Dominion Resources Inc (D): 6.94%
  4. Duke Energy Corporation (DUK): 5.93%
  5. NextEra Energy Inc (NEE): 5.63%
  6. American Electric Power Co Inc (AEP): 4.50%
  7. FirstEnergy Corp (FE): 4.44%
  8. PG&E Corp (PCG): 4.10%
  9. Consolidated Edison, Inc. (ED): 4.03%
  10. Public Service Enterprise Group Inc (PEG): 4.03%

VPU (Vanguard Utilities ETF) follows the MSCI US Investable Market Utilities 25/50 Index which consists of small, medium and large companies. The fund was launched in January 2004. The expense ratio is .25%. AUM equal $936 million and average daily trading volume is 100K shares. As of early November 2011 the annual dividend yield was 3.62% and YTD return 15%.

 

Data as of November 2011

Stock quotes in this article: XLU, VPU, IDU, JXI, PUI, FXU, PSCU 

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