Recently, Morgan Stanley has upgraded the utilities sector to Outperform, arguing that stock prices aren’t keeping pace with earnings growth so far in 2018, which suggests the market participants may be subtly pricing in slowing earnings growth down the line.
“The 15-year and 20-year returns give evidence to the importance of the utilities sector: People and companies need those services in what is a critical industry protected by regulators. Utilities also reward investors with steady dividend payouts,” notes MarketWatch.
Investors have added nearly $424 million to XLU in the fourth quarter.
Rivals 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.