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).
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.