Looking for broad exposure to the Utilities - Broad segment of the equity market? You should consider the State Street Utilities Select Sector SPDR ETF (XLU), a passively managed exchange traded fund launched on December 16, 1998.
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.
Sector ETFs also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. Utilities - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 3, placing it in top 19%.
Index Details
The fund is sponsored by State Street Investment Management. It has amassed assets over $21.88 billion, making it the largest ETF attempting to match the performance of the Utilities - Broad segment of the equity market. XLU seeks to match the performance of the Utilities Select Sector Index before fees and expenses.
The Utilities Select Sector Index seeks to provide an effective representation of the Utilities sector of the S&P 500 Index.
Costs
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for this ETF are 0.08%, making it the least expensive product in the space.
It has a 12-month trailing dividend yield of 2.71%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Utilities sector -- about 100% of the portfolio.
Looking at individual holdings, Nextera Energy Inc (NEE) accounts for about 12.89% of total assets, followed by Constellation Energy (CEG) and Southern Co/the (SO).
The top 10 holdings account for about 59.05% of total assets under management.
Performance and Risk
The ETF return is roughly 14.86% so far this year and was up about 16.4% in the last one year (as of 12/22/2025). In that past 52-week period, it has traded between $36.545 and $46.45.
The ETF has a beta of 0.67 and standard deviation of 16.23% for the trailing three-year period, making it a medium risk choice in the space. With about 34 holdings, it has more concentrated exposure than peers.
Alternatives
State Street Utilities Select Sector SPDR ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, XLU is an outstanding option for investors seeking exposure to the Utilities/Infrastructure ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
Fidelity MSCI Utilities Index ETF (FUTY) tracks MSCI USA IMI Utilities Index and the Vanguard Utilities ETF (VPU) tracks MSCI US Investable Market Utilities 25/50 Index. Fidelity MSCI Utilities Index ETF has $2.13 billion in assets, Vanguard Utilities ETF has $7.75 billion. FUTY has an expense ratio of 0.08%, and VPU charges 0.09%.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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State Street Utilities Select Sector SPDR ETF (XLU): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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