3 Utility ETFs With Massive Upside as Demand Keeps Soaring

Core Insights - The utility sector is experiencing significant growth driven by increasing electricity demand, particularly from AI-driven data centers, which are projected to consume over 1,000 TWh by 2030, up from 460 TWh in 2024, representing 10% of U.S. power consumption [1] - Three utility ETFs—Virtus Reaves Utilities ETF (UTES), First Trust NASDAQ Clean Edge Smart Grid Infrastructure ETF (GRID), and First Trust Utilities AlphaDEX Fund (FXU)—are highlighted as having substantial upside potential due to their strategic positioning in the growing utilities market [1] Group 1: Utility ETFs Performance - Virtus Reaves Utilities ETF (UTES) has gained 34% over the past year, focusing on AI, electric vehicles (EVs), and domestic manufacturing reshoring, with a dividend yield of 1.34% and an expense ratio of 0.49% [1] - First Trust NASDAQ Clean Edge Smart Grid Infrastructure ETF (GRID) has risen 44% in the last year, benefiting from the electrical grid buildout, with a low dividend yield of 0.92% and an expense ratio of 0.56% [1] - First Trust Utilities AlphaDEX Fund (FXU) has delivered a return of 25.7% in the past year, with a dividend yield of 2.06% and a more concentrated portfolio of 42 holdings, utilizing an AlphaDEX approach for stock selection [1] Group 2: Sector Growth and Investor Sentiment - The utilities sector posted earnings growth of 23.1% in Q3 2025, making it the third fastest-growing sector, yet many investors still perceive utility stocks as boring and undervalued [1] - The ongoing demand for electricity is expected to continue rising, positioning the utility sector for explosive growth throughout the 2020s, which presents a compelling investment opportunity [1] - Despite the growth potential, many utility ETFs remain undervalued, indicating a disconnect between market perception and actual sector performance [1]