Investors seeking momentum may have iShares U.S. Utilities ETF (IDU - Free Report) on radar now. The fund recently hit a new 52-week high. Shares of IDU are up approximately 23.3% from their 52-week low of $113.89/share.
But could there be more gains ahead for this ETF? Let’s take a look at the fund and the near-term outlook to get a better idea of where it might be headed.
IDU in Focus
IDU focuses on providing exposure to the utility sector of the U.S. equity market. The fund has a large-cap focus with key holdings in the Electric Utilities, Multi-Utilities and Gas Utilities sectors, with 58.2%, 30.3% and 5.5% allocation, respectively (as of Nov 10, 2017). IDU charges investors 44 basis points in fee per year. Its top holdings include Nextera Energy Inc, Duke Energy Corp and Dominion Energy Inc with almost 23% of the assets allocated to them (see all the Utilities/Infrastructure ETFs here).
Why the move?
The utilities sector has been performing well lately. The sector has been nearing an all-time high. Moreover, higher inflows in funds focused on providing exposure to the sector have provided a boost to this ETF. Strong earnings performance for companies in the sector has also led to the strong performance of the fund.
More Gains Ahead?
Currently, IDU has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook. So it is difficult to get a handle on its future returns one way or another. The fund has a weighted alpha of 19.6. So, there is a promising outlook ahead for those who want to ride this surging ETF a shade further.
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