Utilities Sector: Overview and Funds

The utilities sector is comprised of companies that provide or transmit electricity, gas or water to businesses and consumers. This sector also includes companies that provide electricity through renewable energy sources, such as solar or hydro power, and companies that generate and sell energy to utility companies. This sector does not include companies that explore for, produce or refine oil and gas. These companies are classified in the energy sector. Companies are aligned to an industry based on the company’s core products or the products that generate the most revenue.

Electric Utilities

Companies in this industry provide electricity for homes, commercial buildings and other needs. Electric utilities can be publicly owned/nationalized, investor-owned or cooperatives. Investor-owned simply means that a business, which provides a utility product or service (such as gas, water or electricity), is privately run and managed. Investor-owned utilities may also be public companies whose stocks are traded on an exchange. A cooperative is a business that is jointly owned by several individuals and is democratically managed by these individuals. For a cooperative utility, these individuals may be the customers. A company that is publicly owned or nationalized is managed by the state or a public body representing the community of people. Examples of electric utilities include Consolidated Edison (ConEd), Wisconsin Energy Corp., Dominion Resources and First Energy Corp.

IndustrySub-IndustryDescription

Electric Utilities

Electric UtilitiesCompanies that produce or distribute electricity for commercial and consumer use. This includes nuclear power plants.

Gas Utilities

Companies classified as gas utilities provide gas for consumer and commercial use. Similar to an electric utility, a gas utility may also be publicly owned, investor-owned or a cooperative. Atmos Energy, one of the largest natural gas utilities, is an investor-owned utility. It serves over three million customers across eight states and has revenues exceeding $3 billion. Other gas utilities include AGL Resources, Southern California Gas Company and Pacific Gas.

Industry

Sub-IndustryDescription

Gas Utilities

Gas UtilitiesCompanies that distribute natural and manufactured gas for commercial and consumer use. This excludes companies that explore for or produce gas, which are classified in the energy sector.

Multi-Utilities

Multi-utilities companies provide a combination of gas, electricity, water or other services for consumer and commercial use. Multi-utilities are frequently set up as large holding companies that own a number of smaller utilities. Exelon Corporation, for instance, is one of the largest multi-utilities and has seven subsidiaries that transmit and sell energy as utilities, including Philadelphia Electric Company and Baltimore Gas and Electric. Other examples of multi-utility companies include CenterPoint Energy, Xcel Energy and Ameren Corp.

IndustrySub-IndustryDescription

Multi-Utilities

Multi-UtilitiesUtility companies that have a diverse range of services in addition to electric, gas, and/or water services.

Water Utilities

Water utilities provide water for consumer and commercial use. Given that water is frequently a natural monopoly, water utilities are often publicly owned and regulated by the state in which they operate. For example, the water utility in New York City is publicly owned and operates under the city’s Department of Environmental Protection as the New York City Water Board. Examples of water utilities that are not publicly owned include American Water, Erie Water Works and Aqua America.

Industry

Sub-IndustryDescription

Water Utilities

Water UtilitiesCompanies that purchase and provide water for commercial and consumer use, but do not necessarily collect water. This includes water treatment facilities.

Independent Power and Renewable Electricity Producers

Companies classified in this industry either produce or trade energy for wholesaling or distribution or produce energy through renewable sources. Companies that are classified as independent power producers do not sell energy directly to consumers. Instead, they might generate power and sell this to utilities or companies that sell directly to consumers. Other companies in this industry may buy and sell energy, effectively acting as distributors. Examples of companies in this industry include NRG Energy, Green Mountain Energy (subsidiary of NRG), Calpine and AES Corp.

IndustrySub-IndustryDescription

Independent Power and Renewable Electricity Producers

Independent Power Producers & Energy TradersCompanies that operate as independent power producers (IPPs), gas & power marketing and trading specialists or integrated energy merchants. An IPP (sometimes called a non-utility generator or NUG) is a company, which is not a public utility company, that generates electric power to sell to public utility companies and consumers. An integrated energy merchant sells electric energy to public utilities or other companies across multiple regions, and it may sell directly to consumers.
Renewable ElectricityCompanies that generate and distribute electricity using renewable sources. This includes solar energy, hydropower, wind power, and geothermal energy. This excludes companies that produce solar power systems or cells, which are classified in the information technology sector.

Utilities Sector ETFs and Mutual Funds

We list 76 mutual funds, index funds and ETFs that follow the utilities sector. Some of these funds also cover telecommunications companies or companies that provide basic infrastructure (which are classifed in the industrials sector). The expense ratios for these funds start at 0.10% and go up to 2.35%.

Name

SymbolExpense Ratio

Vanguard Utilities ETF

VPU0.10%

Vanguard Utilities Index Adm

VUIAX0.10%

Fidelity MSCI Utilities Index ETF

FUTY0.12%

Utilities Select Sector SPDR

XLU0.14%

PowerShares S&P SmallCap Utilities Portfolio

PSCU0.29%

Guggenheim S&P 500 Equal Weight Utilities ETF

RYU0.40%

SPDR S&P Global Infrastructure ETF

GII0.40%

SPDR S&P International Utilities Sector ETF

IPU0.40%

iShares U.S. Utilities ETF

IDU0.43%

Guggenheim S&P High Income Infrastructure ETF

GHII0.45%

Deustche X-trackers S&P Hedged Global Infrastructure ETF

DBIF0.45%

ProShares DJ Brookfield Global Infrastructure ETF

TOLZ0.46%

iShares Global Infrastructure ETF

IGF0.47%

iShares Global Utilities ETF

JXI0.47%

Franklin Utilities R6

FUFRX0.47%

John Hancock Multifactor Utilities ETF

JHMU0.50%

Prudential Jennison Utility Z

PRUZX0.54%

WisdomTree Global ex-U.S. Utility ETF

DBU0.58%

Franklin Utilities Adv

FRUAX0.58%

PowerShares DWA Utilities Momentum ETF

PUI0.60%

MFS Utilities R5

MMUKX0.63%

FirstTrust Utilities AlphaDEX Fund

FXU0.66%

American Century Utilities Inv

BULIX0.67%

First Turst NASDAQ Clean Edge Smart Grid Infrastructure ETF

GRID0.70%

Frontier MFG Core Infrastructure Instl

FMGIX0.70%

Franklin Utilities A

FKUTX0.73%

Fidelity® Telecom and Utilities

FIUIX0.74%

MFS Utilities I

MMUIX0.74%

MFS Utilities R4

MMUJX0.74%

S&P Emerging Markets Infrastructure

EMIF0.75%

PowerShares Emerging Markets Infrastructure ETF

PXR0.77%

Wells Fargo Util and Telecomms Inst

EVUYX0.78%

Fidelity® Select Utilities

FSUTX0.80%

Fidelity Advisor® Utilities I

FUGIX0.81%

Prudential Jennison Utility A

PRUAX0.84%

EGShares India Infrastructure ETF

INXX0.85%

Hennessy Gas Utility Investor

GASFX0.93%

Putnam Global Utilities Y

PUTYX0.94%

Reaves Utilities ETF

UTES0.95%

Wells Fargo Util and Telecomms Adm

EVUDX0.95%

MFS Utilities A

MMUFX0.99%

MFS Utilities R3

MMUHX0.99%

Prudential Jennison Utility R

JDURX1.04%

Franklin Utilities R

FRURX1.08%

Fidelity Advisor® Utilities A

FUGAX1.11%

Wells Fargo Util and Telecomms A

EVUAX1.14%

Gabelli Utilities I

GAUIX1.14%

Putnam Global Utilities A

PUGIX1.19%

Franklin Utilities C

FRUSX1.23%

MFS Utilities R2

MURRX1.24%

Reaves Utilities and Energy Infras Instl

RSRFX1.30%

Rydex Utilities Inv

RYUIX1.35%

Gabelli Utilities AAA

GABUX1.39%

Gabelli Utilities A

GAUAX1.39%

Fidelity Advisor® Utilities T

FAUFX1.41%

Putnam Global Utilities R

PULRX1.44%

ICON Utilities S

ICTUX1.50%

Prudential Jennison Utility C

PCUFX1.54%

Prudential Jennison Utility B

PRUTX1.54%

Reaves Utilities and Energy Infras A

RSRAX1.55%

Rydex Utilities A

RYUTX1.60%

Putnam Global Utilities M

PUTMX1.69%

MFS Utilities B

MMUBX1.74%

MFS Utilities C

MMUCX1.74%

MFS Utilities R1

MMUGX1.74%

ICON Utilities A

ICTVX1.75%

Rydex Utilities H

RYAUX1.84%

Fidelity Advisor® Utilities C

FUGCX1.86%

Wells Fargo Util and Telecomms B

EVUBX1.89%

Wells Fargo Util and Telecomms C

EVUCX1.89%

Fidelity Advisor® Utilities B

FAUBX1.93%

Putnam Global Utilities B

PUTBX1.94%

Putnam Global Utilities C

PUTCX1.94%

Miller/Howard Infrastructure Retail

FLRUX1.98%

Gabelli Utilities C

GAUCX2.14%

Rydex Utilities C

RYCUX2.35%

If you’re purchasing shares of a fund, you should always research the fund. This includes researching the fund’s past performance, loads and fees and underlying components among other things.

Comments and Questions