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 Utilities Companies 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.

IndustrySub-IndustryDescription
Gas Utilities Gas Utilities Companies 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-Utilities Utility 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.

IndustrySub-IndustryDescription
Water Utilities Water Utilities Companies 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 Traders Companies 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 Electricity  Companies 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
Symbol
Expense Ratio
Vanguard Utilities ETF VPU 0.10%
Vanguard Utilities Index Adm VUIAX 0.10%
Fidelity MSCI Utilities Index ETF FUTY 0.12%
Utilities Select Sector SPDR XLU 0.14%
PowerShares S&P SmallCap Utilities Portfolio PSCU 0.29%
Guggenheim S&P 500 Equal Weight Utilities ETF RYU 0.40%
SPDR S&P Global Infrastructure ETF GII 0.40%
SPDR S&P International Utilities Sector ETF IPU 0.40%
iShares U.S. Utilities ETF IDU 0.43%
Guggenheim S&P High Income Infrastructure ETF GHII 0.45%
Deustche X-trackers S&P Hedged Global Infrastructure ETF DBIF 0.45%
ProShares DJ Brookfield Global Infrastructure ETF TOLZ 0.46%
iShares Global Infrastructure ETF IGF 0.47%
iShares Global Utilities ETF JXI 0.47%
Franklin Utilities R6 FUFRX 0.47%
John Hancock Multifactor Utilities ETF JHMU 0.50%
Prudential Jennison Utility Z PRUZX 0.54%
WisdomTree Global ex-U.S. Utility ETF DBU 0.58%
Franklin Utilities Adv FRUAX 0.58%
PowerShares DWA Utilities Momentum ETF PUI 0.60%
MFS Utilities R5 MMUKX 0.63%
FirstTrust Utilities AlphaDEX Fund FXU 0.66%
American Century Utilities Inv BULIX 0.67%
First Turst NASDAQ Clean Edge Smart Grid Infrastructure ETF GRID 0.70%
Frontier MFG Core Infrastructure Instl FMGIX 0.70%
Franklin Utilities A FKUTX 0.73%
Fidelity® Telecom and Utilities FIUIX 0.74%
MFS Utilities I MMUIX 0.74%
MFS Utilities R4 MMUJX 0.74%
S&P Emerging Markets Infrastructure EMIF 0.75%
PowerShares Emerging Markets Infrastructure ETF PXR 0.77%
Wells Fargo Util and Telecomms Inst EVUYX 0.78%
Fidelity® Select Utilities FSUTX 0.80%
Fidelity Advisor® Utilities I FUGIX 0.81%
Prudential Jennison Utility A PRUAX 0.84%
EGShares India Infrastructure ETF INXX 0.85%
Hennessy Gas Utility Investor GASFX 0.93%
Putnam Global Utilities Y PUTYX 0.94%
Reaves Utilities ETF UTES 0.95%
Wells Fargo Util and Telecomms Adm EVUDX 0.95%
MFS Utilities A MMUFX 0.99%
MFS Utilities R3 MMUHX 0.99%
Prudential Jennison Utility R JDURX 1.04%
Franklin Utilities R FRURX 1.08%
Fidelity Advisor® Utilities A FUGAX 1.11%
Wells Fargo Util and Telecomms A EVUAX 1.14%
Gabelli Utilities I GAUIX 1.14%
Putnam Global Utilities A PUGIX 1.19%
Franklin Utilities C FRUSX 1.23%
MFS Utilities R2 MURRX 1.24%
Reaves Utilities and Energy Infras Instl RSRFX 1.30%
Rydex Utilities Inv RYUIX 1.35%
Gabelli Utilities AAA GABUX 1.39%
Gabelli Utilities A GAUAX 1.39%
Fidelity Advisor® Utilities T FAUFX 1.41%
Putnam Global Utilities R PULRX 1.44%
ICON Utilities S ICTUX 1.50%
Prudential Jennison Utility C PCUFX 1.54%
Prudential Jennison Utility B PRUTX 1.54%
Reaves Utilities and Energy Infras A RSRAX 1.55%
Rydex Utilities A RYUTX 1.60%
Putnam Global Utilities M PUTMX 1.69%
MFS Utilities B MMUBX 1.74%
MFS Utilities C MMUCX 1.74%
MFS Utilities R1 MMUGX 1.74%
ICON Utilities A ICTVX 1.75%
Rydex Utilities H RYAUX 1.84%
Fidelity Advisor® Utilities C FUGCX 1.86%
Wells Fargo Util and Telecomms B EVUBX 1.89%
Wells Fargo Util and Telecomms C EVUCX 1.89%
Fidelity Advisor® Utilities B FAUBX 1.93%
Putnam Global Utilities B PUTBX 1.94%
Putnam Global Utilities C PUTCX 1.94%
Miller/Howard Infrastructure Retail FLRUX 1.98%
Gabelli Utilities C GAUCX 2.14%
Rydex Utilities C RYCUX 2.35%

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. 

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