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Utilities ETF (FXU) Hits New 52-Week High

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For investors seeking momentum, First Trust Utilities AlphaDEX Fund (FXU - Free Report) is probably on the radar. The fund just hit a 52-week high and is up 26% from its 52-week low price of $32.67/share. 

But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea of where it might be headed:

FXU in Focus

First Trust Utilities AlphaDEX Fund targets the broad utility sector of the U.S. market. It follows the StrataQuant Utilities Index, which is an "enhanced" index and employs the AlphaDEX stock selection methodology to pick stocks from the Russell 1000 Index. The product charges 63 bps in annual fees (see: all the Utilities ETFs here).

Why the Move?

The utility sector has been an area to watch lately, given investors’ drive toward safety in defensive investments, given uncertain trade policies. Being a low-beta sector, utility is relatively protected from large swings (ups and downs) in the stock market and is thus considered a defensive investment or safe haven amid economic or political turmoil.

More Gains Ahead?

Currently, FXU has a Zacks ETF Rank #4 (Sell) with a Medium risk outlook. However, many of the segments that make up this ETF have a strong Zacks Industry Rank. So, there might be some promise for those who want to ride this surging ETF a little further.


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