XLU, IDU, And Utilities: Worst Time In A Decade To Buy

Mar. 20, 2022 7:17 AM ETiShares U.S. Utilities ETF (IDU), XLUVPU, IDU, XLU8 Comments

Summary

  • Utilities have traditionally been an attractive place for income-oriented investors with their stable and generous dividends.
  • However, their dividends need to be interpreted under the context of risk-free rates.
  • The 10-year Treasury rates just surged above 2.15% for the first time since July 2019.
  • The yield spread between utilities ETFs (such as XLU and IDU) and risk-free rates is currently near their thinnest level in a decade.
  • Our market sector dashboard shows that the small-cap and the energy sector are more attractive compared to their historical spectrum.
  • Looking for more investing ideas like this one? Get them exclusively at Envision Early Retirement. Learn More »

Planet Earth At Night - City Lights of Europe Glowing In The Dark

DKosig/iStock via Getty Images

Thesis and Background

We use the following market sector dashboard to put our finger on the pulse of the market and its major sectors. Especially, the simple YS (yield spread, defined as the TTM dividend yield minus the 10-year

Check out our marketplace service

As you can tell, our core style is to provide actionable and unambiguous ideas from our independent research. If your share this investment style, check out Envision Early Retirement. It provides at least 2x in-depth articles per week on such ideas.

We have vetted and perfected our methods with our own money and efforts for the past 15 years. For example, our aggressive growth portfolio has helped ourselves and many around us to consistently maximize return with minimal drawdowns.

Lastly, do not hesitate to take advantage of the free-trials - they are absolutely 100% Risk-Free.

Chart, line chart Description automatically generated

This article was written by

18K Followers

Envision Research, aka Lucas Ma, has over 20+ years of investment experience and holds a Masters with in Quantitative Investment and a PhD in Mechanical Engineering with a focus on renewable energy, both from Stanford University. He also has 30+ years of hands-on experience in high-tech R&D and consulting, housing sector, credit sector, and actual portfolio management.

He leads the investing group Envision Early Retirement along with Sensor Unlimited where they offer proven solutions to generate both high income and high growth with isolated risks through dynamic asset allocation. Features include: two model portfolios - one for short-term survival/withdrawal and one for aggressive long-term growth, direct access via chat to discuss ideas, monthly updates on all holdings, tax discussions, and ticker critiques by request.

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

About IDU ETF

SymbolLast Price% Chg
Expense Ratio
Div Frequency
Div Rate
Yield
Assets (AUM)
Compare to Peers

More on IDU

Related Stocks

SymbolLast Price% Chg
IDU
--
XLU
--