Utility ETFs By Expense, Dividend Yield, Diversification, and Market Correlation
NB: The original market cap values were very wrong, thanks to order of magnitude errors in E*Trade's data. Thanks to Steven Towns for the corrections.
As I recently covered various fundamentals of broad and country-specific Asian ETFs for more aggressive portfolios, I was interested in summarizing a more conservative income sector like utilities.
Here is the data table, sorted by expense. Note that Cap is shown here in dollars, not thousands of dollars, and that Month Traded is shown in millions of dollars.
| Symbol | Expense | Dividend Yield |
Top 10 % | Cap ($) |
Month Traded ($M) |
| XLU | 0.24% | 0.11% | 56.00% | 3 M | 2592 |
| VPU | 0.25% | 2.51% | 43.00% | 393 K | 34 |
| JXI | 0.48% | 0.51% | 42.00% | 55 M | 3 |
| IDU | 0.48% | 2.29% | 43.00% | 980 M | 72 |
| RYU | 0.50% | 1.78% | 25.00% | 10 K | 1 |
| DBU | 0.58% | 0.11% | 59.00% | 26 M | 2 |
| PUW | 0.60% | 0.17% | 29.00% | 33 M | 3 |
| PRFU | 0.60% | 1.76% | 38.00% | 12 K | 2 |
| PUI | 0.60% | 1.60% | 47.00% | 57 K | 3 |
| PHO | 0.60% | 0.46% | 35.00% | 2 M | 85 |
| UTH | 2.71% | 76.00% | 473 K | 459 | |
| UTF | 4.67% | 1 M | 44 | ||
| GUT | 7.24% | 293 K | 2 | ||
| UTG | 5.02% | 596 K | 11 |
It looks like there is no easy answer in this sector, but there are a number of advantages held by some funds.
- The Select SPDR XLU is by far the most dollar liquid utility ETF, followed by the Utility Holders UTH. Investors looking to take very large positions that require stops should almost certainly pick one of these two funds.
- The largest fund is by far the iShares DJ Utility Index tracker IDU, followed by the S&P Global Utilities JXI and the PowerShares Progressive Energy PUW.
- PRFU, the FTSE RAFI Utility tracker, has quite a high expense ratio for just an index tracker in this sector. It's competitors at equivalent expense ratios are either actively managed or hold more uncommon assets like water or progressive energy.
- VPU and IDU have the best Yield minus Expense for those looking for income in their holdings.
- Of the index funds, the Rydex equal-weight seems to have the best diversification at its given expense cost, having only 25% of its holdings in its 10 ten assets (since it is equal-weighted). As equal-weight funds become more popular, it'll be interesting to see how they perform in more bearish markets.
- Michael J Bommarito II's blog
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