Utilities stocks (and ETFs) have generally fared quite well in the last few years, thanks to an interest in low volatility and high dividends among cautious and concerned investors. But there is perhaps reason to now be cautious looking forward; electricity use is declining, threatening the stability of one of the most stable sectors and forcing major utilities to seek out new revenue sources [for other investing and money management tips, check out the Money Management Tips Center over at Dividend.com].
Below, we outline five of the most interesting utilities equity ETFs for investors looking for funds that have performed well in the past and have a unique view of the market sector:
Utilities Select Sector SPDR (XLU) 
This ETF includes US companies from across the board, including electric, independent power producers, energy traders, and gas companies. With a low expense ratio of 18 basis points, this fund offers great exposure to some of the largest utility firms in the US and gives insight into the market conditions [see also ETF Edge: January 2013].
S&P Emerging Markets Infrastructure Index Fund (EMIF)
Narrowing down the utilities sector, EMIF focuses soley on the performance of the infrastructure sector of emerging markets. This specialized fund grew 20% by the end of 2012 as many economies continued their push towards development and recovery after the most recent recession.
Dynamic Utilities Fundamentals (PUI)
Much like XLU, this ETF invests in stocks from the US, but by tracking an index designed to thoroughly evaluate companies based on a wider variety of investment merit criteria, PUI hopes to beat its competitors. These stress points include fundamental growth, stock valuation, investment timeliness, and risk factors. The fund’s methodology has helped it edge out XLU every year since opening in 2005 [for more ETF analysis subscribe to our free newsletter].
India Infrastructure ETF (INXX)
Taking a close look at the Indian economy, INXX is comprised of the 30 leading companies picked to represent the market. Many of these funds actually fall in the basic materials sector, but are still key companies to the development of India. Returning 18% in 2012, this fund will rely heavily on the global economic recovery and India’s continued growth.
S&P SmallCap Utilities Portfolio (PSCU)
Seeing the other side of the American economy, this small cap fund invests in companies principally engaged in various aspects of energy, water, and natural gas distribution. While 80% of these funds are utility firms, the remainder are technology and communication service groups that primarily work in the industry. PSCU does not have the most reliable returns, but it could be an interesting hold for investors looking to take a risk [also see ETF Call And Put Options Explained].
Disclosure: No positions at time of writing.
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