This 1 ETF Could Give Your Portfolio The Stability It Needs Right Now

The Utilities Select Sector SPDR Fund (XLU) provides exposure to the utility sector in the United States. The fund uses a replication strategy to track the performance of the Utilities Select Sector Index.

Securities from companies in the gas utilities, water utilities, independent power producers, multi-utilities, and utilities for the production of renewable and independent power are included in the index. The five-year monthly beta for XLU is 0.54, reflecting its lower volatility compared to the broader market.

In a recessionary environment, the utility sector provides a solid hedge to one’s investment portfolio. In addition, this highly regulated sector is known for its low volatility in terms of financials.

XLU has gained 12.6% over the past year and 10.2% over the past nine months to close its last trading session at $74.75. In addition, it is currently trading only 4.4% below its 52-week high of $78.22.

Here are the factors that could affect XLU’s performance in the near term:

Fund Stats

XLU has $18.13 billion in assets under management and a NAV of $76.66. Its gross expense ratio of 0.10% is significantly lower than the category average of 0.43%. The fund has a net flow of $3.12 billion over the past year and $804.54 million over the past month.

Top Holdings


The fund’s top holdings include NextEra Energy Inc. (NEE) with a 17.2% weight, Duke Energy Corp. (DUK) with an 8.4% weight, Southern Co (SO) with a 7.3% weight, Dominion Energy Inc. (D) with a 6.6% weight, and the Exelon Corp (EXC) with a 5% weight.

Attractive Dividend

XLU’s annual dividend of $1.98 yields 2.96% on prevailing prices. Its dividend payouts have increased at a 3.6% CAGR over the past five years. The fund has a record of…

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