Looking for broad exposure to the Utilities - Broad segment of the equity market? You should consider the Vanguard Utilities ETF (VPU) , a passively managed exchange traded fund launched on January 26, 2004.Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.Investor-friendly, sector ETFs provide many options to gain low risk and dive ...

Core Insights - The utility sector has experienced its strongest performance in over 15 years, achieving a seventh consecutive month of gains, driven by short-term demand and structural tailwinds [1][3]. Performance of Utility ETFs - Reaves Utilities ETF (UTES) led the sector with an 8.6% increase in July, followed by Invesco Dorsey Wright Utilities Momentum ETF (PUI) at 6.8%, Invesco S&P 500 Equal Weight Utilities ETF (RSPU) at 6%, and both First Trust Utilities AlphaDEX Fund (FXU) and Fidelity MSCI Utilities Index ETF (FUTY) at 5.4% each [2]. Factors Driving Growth - Surging power demand due to extreme heat in the U.S. has increased residential power consumption, alongside a significant rise in electricity usage from AI training, data centers, and electric vehicle charging. Electricity demand is projected to grow by approximately 55% from 2020 to 2040, compared to just 9% in the previous two decades [3]. - Utilities serving major tech clients like Amazon, Microsoft, and Meta are entering infrastructure deals funded by these companies, with American Electric Power (AEP) expecting 28% earnings growth by 2028 and Entergy projecting 13% annual industrial sales growth [4]. Rate Increase Requests - Utilities have submitted around $29 billion in rate increase requests for the first half of 2025, nearly double the amount from the previous year, driven by rising wholesale costs and the need for infrastructure investments [5]. Defensive Investment Appeal - Investors are shifting towards utilities as a defensive investment amid market uncertainty, attracted by consistent dividend payouts and regulatory oversight that ensures predictable earnings [6]. Industry Fundamentals - The utility sector benefits from a growing population, increasing demand for essential services like water, gas, and electricity, and the rising adoption of electric vehicles, which will further boost electricity demand [7]. ETFs Overview - **Reaves Utilities ETF (UTES)**: Actively managed ETF with $740.7 million AUM, charges 49 bps in fees, and holds 22 stocks [8]. - **Invesco Dorsey Wright Utilities Momentum ETF (PUI)**: Focuses on 34 companies with relative strength, has $75 million AUM, and charges 60 bps in fees [9]. - **Invesco S&P 500 Equal Weight Utilities ETF (RSPU)**: Offers exposure to 33 equal-weighted companies, has $447.7 million AUM, and charges 40 bps in fees [10]. - **First Trust Utilities AlphaDEX Fund (FXU)**: Holds 40 stocks with $1.7 billion AUM, charges 63 bps in fees [11]. - **Fidelity MSCI Utilities Index ETF (FUTY)**: Tracks 67 utility stocks with $2 billion AUM and charges 0.08% in fees [12].

Core Insights - The Fidelity MSCI Utilities Index ETF (FUTY) is a passively managed ETF launched on 10/21/2013, designed to provide broad exposure to the Utilities - Broad segment of the equity market [1] - The ETF has gained popularity among institutional and retail investors due to its low cost, transparency, flexibility, and tax efficiency [1] Index Details - Sponsored by Fidelity, FUTY has over $1.90 billion in assets, making it one of the larger ETFs in the Utilities - Broad segment [3] - The ETF aims to match the performance of the MSCI USA IMI Utilities Index, which reflects the utilities sector's performance in the U.S. equity market [3] Costs - FUTY has an annual operating expense ratio of 0.08%, making it the least expensive product in its category [4] - The ETF offers a 12-month trailing dividend yield of 2.69% [4] Sector Exposure and Top Holdings - The ETF is heavily allocated in the Utilities sector, with approximately 99.90% of its portfolio [5] - Nextera Energy Inc (NEE) constitutes about 10.92% of total assets, with the top 10 holdings accounting for approximately 53.49% of total assets under management [6] Performance and Risk - As of 07/22/2025, FUTY has returned roughly 12.50% year-to-date and 22.41% over the past year [7] - The fund has traded between $45.51 and $54.12 in the past 52 weeks, with a beta of 0.58 and a standard deviation of 17.72% over the trailing three-year period, indicating medium risk [7] Alternatives - FUTY holds a Zacks ETF Rank of 2 (Buy), indicating strong expected performance based on asset class return, expense ratio, and momentum [8] - Other ETFs in the utilities space include Vanguard Utilities ETF (VPU) and Utilities Select Sector SPDR ETF (XLU), with VPU having $7.22 billion in assets and XLU $20.31 billion [9]