Utilities exchange traded funds (ETFs) don’t conjure up images of glamour, but they do have staying power and tend to be more recession-proof than other sectors. They are considered the most stable performers during difficult market conditions and have been on a steady rise since 2003. Joanne Von Alroth of Investor’s Business Daily reports that for the 12 sectors tracked by Morningstar, the utilities 3.43% rise made the group number one for the one month period ended November 27.

Subprime worries mixed with economic discomfort have investors searching for cover. And lets face it-everyone needs water, gas, electricity no matter what the economic conditions. Utility stocks also pay higher dividends than others.

To harness some of the power held by utilities look into:

  • iShares Dow Jones US Utilities (IDU) up 16.9% year-to-date
  • Utilities Select Sector SPDR (XLU) up 18.1% year-to-date

Xluchart

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.