Critics Abound, but Utilities ETFs Keep Rising

Even frothy valuations on utilities are not deterring investors.

Goldman Sachs notes “that regulated utilities now trade at a forward price-to-earnings ratio in excess of the S&P 500 based on estimated 2017 and 2018 earnings. That ratio is also elevated relative to the sector’s five-year average,” reports Bloomberg.

Related: Best of Both Worlds With This Dividend ETF

Some investors see opportunity with rate-sensitive assets such as XLU and real estate ETFs, noting that 10-year yields are overbought and sentiment against the likes of XLU is at bearish extremes, which could create opportunity from the long side with the utilities sector.

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Utilities Select Sector SPDR