Vanguard Utilities ETF (NYSEARCA:VPU) — This exchange-traded fund is designed to track the performance of the MSCI US Investable Market Utilities Index. The index is composed of U.S. companies in the utilities sector. The holdings may range in size from small to large companies. Morningstar rates this ETF with four stars.
The one-year market return is 17%-plus and the year to date (through Feb. 28) is 6%-plus. The expense ratio is a modest 0.1%. VPU pays an annual dividend of $3.41 over the last year, providing a dividend yield of 3%. This ETF was selling at a slight discount to its net asset value (NAV) at $113.99 on March 21, 2017 as reported by S&P Capital IQ.
Top ten holdings: NextEra Energy Inc (NYSE:NEE), Duke Energy Corp (NYSE:DUK), Southern Co (NYSE:SO), Dominion Resources, Inc. (NYSE:D), Xcel Energy Inc (NYSE:XEL), Exelon Corporation (NYSE:EXC), PG&E Corporation (NYSE:PCG), American Electric Power Company Inc (NYSE:AEP), Sempra Energy (NYSE:SRE) and Edison International (NYSE:EIX).
Technically VPU has tracked its index well. It displays a large “V” formation that dominates the chart, and on Tuesday it broke from a small “V” at 114, putting this ETF only 2 points from a new all-time high. Immediate support is at Tuesday’s breakout at $114.
This is not a trading stock, but a break through the high at $116 could result in a run to $120. This, of course, depends upon news and political occurrences beyond the scope of this review. However, this ETF is considered to be defensive in nature and most appropriate as a long-term, income-producing investment with a secondary goal of capital appreciation.
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