Utilities ETF (VPU) Hits New 52-Week High

For investors seeking momentum, Vanguard Utilities ETF VPU is probably on radar now. The fund just hit a 52-week high and is up about 20.2% from its 52-week low price of $99.85/share.

But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed:

VPU in Focus

This ETF provides exposure to companies that distribute electricity, water, or gas, or that operate as independent power producers. It holds 76 securities in its basket and has key holdings in electric utilities and multi utilities. VPU is one of the popular and liquid ETFs in the utilities space with AUM of nearly $2.6 billion and average daily volume of roughly 126,000 shares. Expense ratio comes in at 0.10% (see: all the Utilities ETFs here).

Why the Move?

The utility sector has been an area to watch lately given that political turmoil and geopolitical risk raised the appeal of utility stocks. Being the low-beta sector, utility is relatively protected from large swings (ups and downs) in the stock market and is thus considered a defensive investment or one that is unaffected by economic cycles and politics. Additionally, utilities offer solid dividend payouts and excellent capital appreciation over the longer term.

More Gains Ahead?

Currently, VPU has a Zacks ETF Rank #4 (Sell) with a Medium risk outlook, suggesting that the outperformance is unlikely to continue in the months ahead. However, the fund seems to remain strong given a high weighted alpha of 13.80% and a low 20-day volatility of 6.83%. As a result, there is definitely still some promise for investors who want to ride on this surging ETF a little further.

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VIPERS-UTIL (VPU): ETF Research Reports

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