Morningstar Rating

ETF Research and Analysis

by Robert Goldsborough
IShares U.S. Utilities ETF IDU is an expensive option for investors who want broad exposure to defensive, high-yielding U.S. utilities companies. This high-cost exchange-traded fund follows a market-cap-weighting scheme,  Read more 

Bull Case

The utilities sector is one the least volatile segments of the market.
IDU offers an attractive, stable dividend yield relative to many other sectors.
Utilities companies' fundamentals have remained strong. While energy efficiency means electricity demand is still growing but at a slower and slower rate, the sector is in great financial health with good payout ratios, leverage that is in line with acceptable levels, no imminent threat of dividend cuts, and good growth opportunities in spite of weak electricity demand. Read more 

Bear Case

IDU charges about three times as much as its peers.
Utilities face a tough regulatory environment.
Rising interest rates can hurt the fund's performance.  Read more 

This Strategic Beta ETF Ticks a Lot of Boxes 
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