The top five holdings of this utility ETF are: NextEra Energy Inc (NEE, 18.28% of assets); Duke Energy Corp (DUK, 7.98%), Southern Co (SO, 7.18%), Dominion Energy Inc (D, 6.86%), and Exelon Corp (EXC, 4.68%). The ETF has a current dividend yield of 3.17%, paid quarterly.
Utilities Select Sector SPDR Fund (XLU)
From Stock Trader’s Almanac
Utilities tend to be a defensive sector of the market and historically have seen gains during the “Worst Six Months,” May through October.
With over $12 billion in assets and ample average daily trading volume, SPDR Utilities is a top choice to consider holding during Utilities’ seasonally favorable period. It has a gross expense ratio of just 0.12% and a relatively attractive yield of 3.14%.
XLU could be bought on dips below $61.70. This is around halfway between its projected monthly pivot point and monthly support. Based upon its 15-year average return of 7.7% (excluding dividends and trading fees) during its favorable period mid-March to the beginning of October, set an auto-sell price at $73.10. If purchased an initial stop loss of $55.53 is suggested.
Jeffrey A. Hirsch, Stock Trader’s Almanac, stocktradersalmanac.com, 800-762-2974, February 4, 2021