Quick Read – XLU puts 58% in just 10 mega-caps with NextEra at 14%, while VPU spreads across 75 utilities at near-identical cost. – FXU’s factor-screening has outrun cap-weighted peers with 21% one-year returns but charges seven times more, making it a satellite rather than core…
lding. – US electricity demand grew roughly flat for a decade. That ended once hyperscalers began signing twenty-year power purchase agreements to feed AI training clusters
Utilities are now planning generation and transmission build-outs on a scale not seen since the 1970s, and three ETFs offer different ways to own that capex cycle: Utilities Select Sector SPDR Fund (NYSEARCA:XLU), Vanguard Utilities Index Fund (NYSEARCA:VPU), and First Trust Utilities AlphaDEX Fund (NYSEARCA:FXU). Each fund holds US utilities with meaningfully different construction. One is a mega-cap, cap-weighted concentrate.
One is a broad index spanning large, mid, and small names. One screens on growth and value factors rather than market cap. The right fit depends on whether the investor wants the names doing the most generation spending, the widest spread of regulated rate bases, or a tilt toward utilities scoring best on factor models.