Utilities ETFs Were a Steady Hand in a Shaky Market

While the rest of the markets stumbled, utilities stocks and sector-related ETFs continued to push forward over October.

Over the past month, the Utilities Select Sector SPDR (NYSEArca: XLU) gained 1.9%, Vanguard Utilities ETF (NYSEARCA: VPU) rose 1.2%, Fidelity MSCI Utilities Index ETF (NYSEARCA: FUTY) added 1.1% and iShares U.S. Utilities ETF (NYSEArca: IDU) increased 1.4%. In comparison, the S&P 500 declined 6.2%.

The utilities sector was suppose to be a throw away investment as many anticipated a strong economy with a full labor market to push up interest rates, which traditionally weighed on the bond-like utilities stocks.

However, with inflation relatively under control and benchmark Treasury yields still stuck around 3%, utilities remain attractive for yield hunters. Moreover, after the recent bout of volatility, investors are still still looking at the bond-esque sector as a safe way to remain the game and generate some extra dividends on the side.