For investors looking for momentum, Utilities Select Sector SPDR Fund (XLU - Free Report) is probably a suitable pick. The fund just hit a 52-week high, up roughly 28.1% from its 52-week low of $50.81/share.
But does it have more gains in store? Let’s take a look at the fund and its near-term outlook to gain an insight into where it might be headed:
XLU in Focus
The fund provides investment results that, before expenses, replicate the price and yield performance of the Utilities Select Sector Index. XLU is charging 13 bps in fees. The fund has amassed $11.39 billion in AUM (see all Utilities/Infrastructure ETFs here).
Why the Move?
The Fed has cut rates for the second time in September 2019. In a lower-rate environment, high-dividend-yield sectors such as utilities generally are the biggest beneficiaries given its sensitivity to interest rates. This is especially true as it offers higher returns due to its outsized yields. Further, Sino-US trade spat ambiguity, rising Middle East tensions, talks of Trump impeachment and soft consumer confidence data, uncertainty in market conditions due to geopolitical tensions, slowdown in the global economy and Brexit woes are making investors jittery, adding to the lure of these funds.
More Gains Ahead?
Currently, XLU has a Zacks Rank #3 (Hold) with a Medium risk outlook. Therefore, it is hard to get a handle on its future returns one way or the other. However, it seems that XLU might remain strong given a positive weighted alpha of 25.0 and a mediocre risk as depicted by a 20-day volatility of 10.3%. 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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Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
For investors looking for momentum, Utilities Select Sector SPDR Fund (XLU - Free Report) is probably a suitable pick. The fund just hit a 52-week high, up roughly 28.1% from its 52-week low of $50.81/share.
But does it have more gains in store? Let’s take a look at the fund and its near-term outlook to gain an insight into where it might be headed:
XLU in Focus
The fund provides investment results that, before expenses, replicate the price and yield performance of the Utilities Select Sector Index. XLU is charging 13 bps in fees. The fund has amassed $11.39 billion in AUM (see all Utilities/Infrastructure ETFs here).
Why the Move?
The Fed has cut rates for the second time in September 2019. In a lower-rate environment, high-dividend-yield sectors such as utilities generally are the biggest beneficiaries given its sensitivity to interest rates. This is especially true as it offers higher returns due to its outsized yields. Further, Sino-US trade spat ambiguity, rising Middle East tensions, talks of Trump impeachment and soft consumer confidence data, uncertainty in market conditions due to geopolitical tensions, slowdown in the global economy and Brexit woes are making investors jittery, adding to the lure of these funds.
More Gains Ahead?
Currently, XLU has a Zacks Rank #3 (Hold) with a Medium risk outlook. Therefore, it is hard to get a handle on its future returns one way or the other. However, it seems that XLU might remain strong given a positive weighted alpha of 25.0 and a mediocre risk as depicted by a 20-day volatility of 10.3%. As a result, there is definitely still some promise for investors who want to ride on this surging ETF a little further.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free>>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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