Vanguard Utilities ETF underperforms broader markets despite AI-driven electricity demand, lagging tech-focused funds year to date.
The Vanguard Utilities ETF (VPU) has delivered 14.4% annualized returns over three years but trails the S&P 500 and Nasdaq-100 year to date and over the past decade. The fund holds 68 utility stocks, benefiting indirectly from AI-driven electricity demand yet failing to match tech sector gains.
Over 22 years, VPU posted 9.8% annualized returns, reflecting steady but slower growth compared to tech-heavy indices. The Invesco QQQ Trust ETF (QQQ), tracking the Nasdaq-100, includes major AI stocks and has outperformed utility-focused funds amid the AI boom.
Analysts suggest utility stocks may not be the best proxy for AI growth, favoring tech ETFs for investors bullish on artificial intelligence.