On a good move up on Friday in Utilities, we saw some downside hedging likely from either long holders of the underlying if not outright bearish speculators.
The September 42.50 puts traded in good size in XLU (SPDR Utilities Select Sector, Expense Ratio 0.18%) and these are clearly short dated options. Interestingly, and something that we noted last week, Utilities in terms of not only XLU but IDU as well have had $>237 million and >$460 million respectively flow out of these funds inside of the last week alone.
XLU still has a substantial asset base at north of $5.7 billion while IDU is back down to about $672 million after the recent flows out, and amid notable volume spikes.
XLU remains the largest Utility equity focused ETF in the U.S. listed category, significantly larger than the current runner-up VPU (Vanguard Utilities, Expense Ratio 0.14%) which has about $1.7 billion in AUM.
IGF (iShares Global Infrastructure, Expense Ratio 0.47%) is another notable fund that has exposure to the sector although it is not a Utilities pure-play with about 38% of the portfolio invested in Global utilities companies, and this ETF now has more than $1 billion in assets under management.
The four aforementioned funds are all up in the 14-15% range YTD, as Utilities have greatly outpaced the broad market in this time period. Infrastructure based funds have participated in the price appreciation as well, as we see INXX (EGShares India Infrastructure, Expense Ratio 0.85%) for example trading at its highest levels since early 2012 on literally exponential trading volume since May in the product, and this is at least partially attributable to the general uptick in interest in trading Indian based equities throughout the spring and summer that we have witnessed.
Utilities Select Sector SPDR
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