Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your experience. Save up to 40% More details

2 ETFs For Utility And Infrastructure Bulls

By (Tezcan Gecgil/ )ETFsApr 29, 2022 09:50
2 ETFs For Utility And Infrastructure Bulls
By (Tezcan Gecgil/ )   |  Apr 29, 2022 09:50
Saved. See Saved Items.
This article has already been saved in your Saved Items

Investing in passive-income stocks appeal to many investors who are nervous about the downward-trending market. In the first four months of the year, broader indices as well many darlings of the pandemic have been volatile and are mostly in negative territory.

Therefore, today, we’ll introduce two exchange-traded funds (ETFs) that focus mainly on utility and infrastructure stocks. In the flight to safety, these shares could offer some calm for many retail investors.

In recent weeks, we introduced several similar sectoral ETFs, including:

  • Utilities Select Sector SPDR® Fund (NYSE:XLU)—up 1.5% year-to-date (YTD);
  • Fidelity® MSCI Utilities Index ETF (NYSE:FUTY)—up 0.9% YTD;
  • iShares US Infrastructure ETF (NYSE:IFRA)—down 2.9% YTD;

We also looked at several multi-asset funds that invest in utilities in addition to other sectors:

  • Alpha Architect Gdsdn Dynmc Mlt-Asst ETF (NYSE:GDMA)—up 3.5% YTD;
  • First Trust Multi-Asset Diversified Income Index Fund (NASDAQ:MDIV)—down 1.5% YTD;
  • Invesco Real Assets ESG ETF (NYSE:IVRA)—up 2.4% YTD.

Thus, the following two ETFs build upon our earlier discussion of the sector.

1. Vanguard Utilities Index Fund ETF Shares

  • Current Price: $159.44
  • 52-week range: $138.25 - $167.48
  • Dividend yield: 2.68%
  • Expense ratio: 0.10% per year

Our first fund, the Vanguard Utilities Index Fund ETF Shares (NYSE:VPU), invests in utilities that mainly distribute electricity, gas or water. They could also be independent power producers. The fund was first listed in January 2004.

VPU Weekly
VPU Weekly

VPU, which tracks MSCI US Investable Market Index, currently has 64 holdings. Electric utilities have the largest slice with almost 60%, followed by multi, gas and water utilities.

The top 10 stocks in the portfolio account for over $8.1 billion in net assets. NextEra Energy (NYSE:NEE), Duke Energy (NYSE:DUK), Southern (NYSE:SO), Dominion Energy (NYSE:D) and Sempra Energy (NYSE:SRE) are among those leading names.

The ETF is up almost 2% YTD and 11.1% in the past 12 months. Trailing P/E and P/B ratios stand at 24.6x and 2.4x.

Although the sector is not fully immune from troubles in Wall Street, we still believe a fund like VDU should be in long-term portfolios. Most utilities are able to pass increasing costs to customers and thus typically have stable earnings. They are also likely to be at the center of decarbonization-driven initiatives.

2. SPDR S&P Global Infrastructure ETF

  • Current Price: $57.59
  • 52-week range: $51.21 - $59.67
  • Dividend Yield: 2.23%
  • Expense ratio: 0.40% per year

Next up is the SPDR® S&P Global Infrastructure ETF (NYSE:GII), which invests in large-cap infrastructure-related global companies. The fund started trading in January 2007, and net assets stand at $509.74 million.

GII Weekly
GII Weekly

GII, which tracks S&P Global Infrastructure Index, holds 76 stocks. With regards to sub-sectors industrials and utilities each comprise around 40% of the portfolio, followed by energy.

Almost 40% of the portfolio is held in the top 10 stocks. Over a third of the names come from the US. Next are companies from Canada, Australia, Italy, Spain, France, China, Mexico, Germany and others.

Leading holdings on the roster include the Australian toll-road operator Transurban (ASX:TCL), energy infrastructure group Enbridge (NYSE:ENB), Italian toll road and airport management company Atlantia (OTC:ATASY), Spanish airport operator Aena (BME:AENA), and NextEra Energy.

The fund has returned 6.2% so far in 2022, and 8.5% over the past year. GII also hit a multi-year high in recent days. Trailing P/E and P/B ratios stand at 19.85x and 2.09x.

PWC suggests:

"The infrastructure sector sits at a collision point of global disruptions, including shifts in capital availability, evolving social and environmental priorities, and rapid urbanisation… Successful infrastructure delivery demands close alignment and collaboration between a wide range of participants”

We like many of these high-quality global infrastructure names, which also include utilities, in GII. They are likely to create shareholder value for many quarters to come.

2 ETFs For Utility And Infrastructure Bulls

Related Articles

2 ETFs For Utility And Infrastructure Bulls

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
Sign up with Email