While utilities stocks can outperform during periods of elevated market volatility, historical data indicate the sector is also a winner over longer holding periods.
“In recommending defensive sectors, including the health sector .SPXHC in some instances, many strategists cited decelerating U.S. and global economic growth and the potential for higher market volatility,” according to Reuters.
Alternatives to XLU include the Vanguard Utilities ETF (NYSEARCA: VPU), Fidelity MSCI Utilities Index ETF (NYSEARCA: FUTY), iShares U.S. Utilities ETF (NYSEArca: IDU) and Reaves Utilities ETF (NYSEArca: UTES).
For more information on the utilities sector, visit our utilities category.