Utilities are very boring businesses. However, they tend to generate steady returns.
The benchmark S&P 500 (^GSPC 0.01%) returned 19% in the past year, while the utilities sector surged 33% as domestic electricity demand reached a record high in 2024. That shocking trend (bad pun intended) is likely to continue as artificial intelligence boosts data center power consumption.
I think exchange-traded funds (ETFs) offer one of the best ways to invest. You can buy a basket of stocks (or bonds) in one fell swoop.
The Vanguard Utilities ETF (VPU) was launched on 01/26/2004, and is a passively managed exchange traded fund designed to offer broad exposure to the Utilities - Broad segment of the equity market.
With interest rates falling and political uncertainty, adding utilities with Vanguard Utilities Index Fund ETF Shares offers stability and an above-market yield in the current environment. The VPU ETF's holdings include leading U.S. utility companies, offering a 2.94% yield, low management fees, and potential for capital growth despite recent corrections. Elevated long-term rates have pressured utility stocks, but VPU's impressive Seeking Alpha ETF Grades and bullish long-term stock trends support continued growth.
Vanguard Utilities Index Fund ETF Shares is a reliable, long-term investment akin to insurance, providing stability in a portfolio. The VPU ETF boasts an extremely low expense ratio of 0.10%, making it a cost-effective choice for investors. VPU may not be glamorous, but its consistent performance and low costs make it a valuable holding.
AI is an electrifying technology. It can significantly reduce the time needed to perform a whole host of tasks, which has the potential to significantly boost productivity.
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 01/26/2004.
Investing in the stock market right now may be both exciting and nerve-racking given how well it has been performing. You may want to buy into the rally, but at the same time, you may also be nervous that it may be getting overheated and due for a possible correction next year.
This has been one of my favorite ETFs for years.
Low-cost ETFs can be ideal investments for set-and-forget investors.
Artificial intelligence could drive the greatest increase in U.S. electricity demand since the beginning of the century.