Vanguard Utilities Index Fund ETF Shares is outperforming the S&P 500 due to robust electricity demand driven by vehicle electrification and AI-powered data centers. The utilities sector is poised for explosive growth, with significant capital investments from major companies like NextEra, Duke Energy, and Dominion Energy. VPU offers a diversified portfolio with strong dividend yields and low expense ratios, making it an attractive long-term investment.
It's been a rough start to 2025, with the S&P 500 having its worst quarter since 2022 followed by escalating trade tensions in April. Yet through it all, the utilities sector has been a passive-income powerhouse and a beacon of safety thanks to its low volatility.
In 1976, Vanguard launched the first index fund. Since then, thousands more have come into existence, giving investors an easy and affordable way to buy a passively managed basket of stocks.
With inflationary pressures continuing to weigh on global markets, investors are increasingly looking for ways to safeguard their portfolios.
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.