State Street’s $22.6 billion XLU fund has outperformed US 10-year bonds and inflation in 13 of the last 20 years.
State Street’s Utilities Select Sector SPDR ETF (XLU) has delivered stronger returns than the US 10-year Treasury bond and inflation in 13 of the past 20 years. The $22.6 billion fund carries a 4-star Morningstar rating, a 2.54% yield, and a 10-year trailing return of 10.27%.
Rising global electricity demand, driven by AI data centers, electric vehicles, and energy mandates, is reshaping utilities into growth assets. The sector’s dividends also benefit from favorable tax treatment compared to bonds.
Despite historical perceptions of utilities as defensive plays, their performance has defied expectations amid shifting market dynamics.