As second half of the year approaches, many investors find themselves totally perplexed in view of the activity shown in recent months by volatile stock. Stubbornly high level of unemployment has some predicting a possible double dip into the recession, while expectations for a continued low trend in interest rates and strong earnings does give the others some hope that under these circumstances the economy must pull through these rough times and surge forward during the other half of the year.
Against this indecisive backdrop, a number of investors are uncertain about how to rearrange their portfolio. Some have already fled to whichever safe havens they deemed secure, opting to quietly watch from a distance while the turbulent clouds clear. Others have decided on a far less harsh course of action by maintaining their equity exposure, though shifting further down the high risk spectrum. As of late, one market sector that still continues to attract plenty of attention is the utility ETFs. Traditionally known to be among the least affected industries, utility ETFs offer the investors an attractive option to even out the risk level, yet keep maintain their equity exposure.
Utilities Select Sector SPDR (NYSE: XLU)
This utility ETF has attained nearly three-fifths the assets that were invested in this category, which is a remarkable market share. Though obvious reasons for preference of XLU are its cost efficiency and liquidity, it is certainly not the only available ETF option for exposure in the utilities sector. Given below are three other, not so well known, ETFs which equally offer a unique exposure, but may have unintentionally avoided the radar screens of many investors.
iShares S&P Global Utilities Sector Index Fund (NYSE: JXI)
In order to obtain exposure to international utilities, investors have to look a little beyond XLU that invests exclusively in US-based stocks. On the other hand, JXI allocates around 60% of its total assets for international companies in Germany (10.5%), Japan (10.1%) and France (9.1%). This Utility ETF holds a total of 85 companies, with the largest weightings for E.ON (7%), GDF Suez (5.5%) and Rwe (4.6%) respectively.
iShares S&P Global Infrastructure Fund (NYSE: IGF)
IGF offers an attractive choice for a focused play on which is not only limited to the utility industry but also includes the market’s infrastructure segment. This Utility ETF allocates about one quarter of its total assets to US companies, with France, Germany and Canada receiving some major allocations. Like JXI, E.ON is one of its major holding, whereas the other two prime firms are TransCanada Corp and Enbridge.
NASDAQ Clean Edge Smart Grid Infrastructure Index Fund (NASDAQ: GRID)
While it does not play on the utilities industry alone, its holdings are entwined with the sector. It duplicates the Nasdaq OMX Clean Edge Smart Grid Infrastructure Index, a scale designed to keep a track of the performance of stocks of the grid as well as the electric energy infrastructure sector.