Utilities Sector Equity

Utilities mutual funds and ETFs primarily invest in the utilities sector, which... Utilities mutual funds and ETFs primarily invest in the utilities sector, which includes companies that generate electricity, distribute natural gas, or offer waste-water treatment among other services. These companies feature a wide range of market capitalizations and can focus on the domestic or international markets. Depending on the mandate, these funds can be actively or passively managed. Utilities mutual funds and ETFs are defensive investments. They tend to own value stocks, which trade at reasonable valuations and offer investors attractive ongoing dividend payments. Some of the companies in this sector own the rights to distribute their product to a given population, which means their revenue is fairly predictable. These funds may be appropriate for conservative-minded investors who prioritize capital preservation. However, there is still risk in investing in the utilities sector. A rise in long-term interest rates can make utilities stocks relatively less attractive, and see their shares decline as a result. Another risk for some utilities is that the price of a key input (natural gas, for example) rises, which can shrink their profit margins. Last Updated: 01/27/2025 View more View less

Utilities mutual funds and ETFs primarily invest in the utilities sector, which includes companies that generate electricity, distribute natural gas, or offer waste-water treatment among other services. These companies feature a wide range... Utilities mutual funds and ETFs primarily invest in the utilities sector, which includes companies that generate electricity, distribute natural gas, or offer waste-water treatment among other services. These companies feature a wide range of market capitalizations and can focus on the domestic or international markets. Depending on the mandate, these funds can be actively or passively managed. Utilities mutual funds and ETFs are defensive investments. They tend to own value stocks, which trade at reasonable valuations and offer investors attractive ongoing dividend payments. Some of the companies in this sector own the rights to distribute their product to a given population, which means their revenue is fairly predictable. These funds may be appropriate for conservative-minded investors who prioritize capital preservation. However, there is still risk in investing in the utilities sector. A rise in long-term interest rates can make utilities stocks relatively less attractive, and see their shares decline as a result. Another risk for some utilities is that the price of a key input (natural gas, for example) rises, which can shrink their profit margins. Last Updated: 01/27/2025 View more View less