Utilities SPDR (XLU)
Essential services still are a compelling place for income-oriented investors. While there are challenges facing the utilities sector such as low growth, competition from renewable energy and regulatory concerns there is also much to like about the sector.
Simply put, our need for energy and its delivery to homes and businesses is not going away.
The Utilities SPDR (XLU) is an ETF option that allows investors to plug in to the largest and most successful names in the utility industry via a single holding.
This fund is full of high-quality names with sustainable dividends and products that we simply cannot live without. Top among XLU’s 31 holdings are Duke Energy (DUK), Dominion Resources (D), Next Era Energy (NEE), Southern Co. (SO) and Exelon (EXC).
Expenses are low at just 0.18% annually, or just $18 for every $10,000 invested. Meanwhile, the dividend should be attractive to retirement investors, at an SEC yield of 3.8% and a trailing 12-month yield of 3.9%.