Hiding Out With Utility ETFs

All investment tools have strengths and weaknesses and exchange traded funds (ETFs) just happen to benefit the utilities sector. While one type of product may perform well for an area, another can be ill-suited.  Looking at the utility sector, these stocks tend to have higher yields, lower volatility and stable companies backing them.  Roger Nusbaum for TheStreet.com reports this time, closed-end funds didn’t offer the benefits of the utilities sector.  The market price moved down more than the net asset value (NAV) and the sector.

iShares Dow Jones Utilities (IDU) captured the stability and low volatility offered by utilities stocks.  It is up 14.9% year-to-date and has a 2.4% yield.  Top holdings include Exelon Corp. (EXC) and Southern Co. (SO).