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Investors seeking momentum may have iShares U.S. Utilities ETF IDU on radar now. The fund recently hit a new 52-week high. Shares of IDU are up approximately 23.3% from their 52-week low of $113.89/share.
But could there be more gains ahead for this ETF? Let’s take a look at the fund and the near-term outlook to get a better idea of where it might be headed.
IDU in Focus
IDU focuses on providing exposure to the utility sector of the U.S. equity market. The fund has a large-cap focus with key holdings in the Electric Utilities, Multi-Utilities and Gas Utilities sectors, with 58.2%, 30.3% and 5.5% allocation, respectively (as of Nov 10, 2017). IDU charges investors 44 basis points in fee per year. Its top holdings include Nextera Energy Inc, Duke Energy Corp (NYSE:DUK) and Dominion Energy Inc with almost 23% of the assets allocated to them (see all the Utilities/Infrastructure ETFs here).
Why the move?
The utilities sector has been performing well lately. The sector has been nearing an all-time high. Moreover, higher inflows in funds focused on providing exposure to the sector have provided a boost to this ETF. Strong earnings performance for companies in the sector has also led to the strong performance of the fund.
More Gains Ahead?
Currently, IDU has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook. So it is difficult to get a handle on its future returns one way or another. The fund has a weighted alpha of 19.6. So, there is a promising outlook ahead for those who want to ride this surging ETF a shade further.
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