Dow Jones soars above 23,000. Is it too stretched? >>> READ MORE

5 Stocks to Start a College Grad’s Retirement

An affordable small portfolio for a beginner on a budget

      View All  

Utility Select Sector SPDR

Cost: ~$35 per unit

In the interest of full disclosure, I’m not a big fan of exchange-traded funds for my personal use. But if my college investor wants to truly diverisify, the Select Sector Utilities SPDR (NYSE:XLU) is one of the most cost-efficient ways to accomplish the task.

For a price of roughly $35 per unit, you’re getting exposure to 31 different holdings across the utility sector — as stable a source of income as you can find in equities. The fund leverages utility giants like Duke (NYSE:DUK) and Southern Co. (NYSE:SO), along with other energy interests like Oneok Partners (NYSE:OKS), a natural gas master limited partnership.

Utility stocks have taken it on the chin a little bit this year, but they’re generally solid over the very long term. What you’re really focused on here isn’t growth, but dividends — and XLU delivers with a roughly 4% yield. Not to mention, you’re paying a scant 0.18% in fees to jump into XLU, or just 18 cents a year for every $100 invested.

Article printed from InvestorPlace Media,

©2017 InvestorPlace Media, LLC