Utilities Select Sector SPDR ETF (XLU) — This fund invests in publically traded equities in the Utilities Select Sector Index, which include electric utilities, multi-utilities, independent power producers and energy traders, and gas utilities.
XLU rose 16.6% in the first half of 2014 and currently provides a yield of 3.44%. Its gross expense ratio is 0.16%, and it is rated “three stars” by Morningstar.
Despite Tuesday’s rush to buy technology, I’ll be staying with the mid-summer strategy of buying less volatile stocks. XLU is in a solid uptrend with support at its 50-day moving average and its intermediate trendline at $42.50. My three-month target is $48 plus dividends.
XLU is a good place to park trading gains until we have a pullback or correction. As advised in today’s Daily Market Outlook, it may be time for traders to cash in quickly won gains. Long-term investors should remain invested with 70% equities and 30% cash.