5-Star ETFs Poised to Pop: Vanguard Utilities

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, the Vanguard Utilities ETF (NYS: VPU) has earned a coveted five-star ranking.

With that in mind, let's take a closer look at Vanguard Utilities and see what CAPS investors are saying about the ETF right now.

Vanguard Utilities facts


January 2004

Total Assets

$947.4 million

Investment Approach

Seeks to track the performance of the MSCI US Investable Market Utilities 25/50 Index, which includes stocks of U.S. companies within the utilities sector.

Expense Ratio


1-Year / 3-Year / 5-Year Return

15.6% / 12.1% / 3.7%

Top Holdings with High CAPS Rating (4 or 5 Stars) and Portfolio Weight

Southern (NYS: SO) (6.6%)
Duke Energy (NYS: DUK) (4.9%)
PPL (NYS: PPL) (3.1%)

Dividend Yield



iShares Dow Jones US Utilities (NYS: IDU)
iShares S&P Global Utilities (NYS: JXI)

Sources: Morningstar and Motley Fool CAPS.

On CAPS, 95% of the 107 members who have rated Vanguard Utilities believe the ETF will outperform the S&P 500 going forward. These bulls include CKMayOrg and johnw106.

Having gotten on board several years ago, CKMayOrg listed several of the ETF's positives: "Safe sector for a ... volatile market, great average returns, highest [S]harpe ratio of any similar ETFs (one of my favorite ways to compare ETFs), and it's Vanguard! Gotta love Vanguard, they never let me down."

In fact, Vanguard Utilities sports a low expense ratio of 0.24%. That's cheaper than other utility ETFs like iShares Dow Jones US Utilities (0.47%) and iShares S&P Global Utilities (0.48%).

CAPS member johnw106 elaborates on the bull case:

A very attractive addition to a portfolio to grant exposure to the utility sector or a core holding for a buy and hold ETF portfolio.

This ETF slides nicley into the income allocation section and gives instant diversifacation among the top utilty companys.

Mild growth potential is icing on a very tasty cake for those with a time horizon of five or more years.

What do you think about Vanguard Utilities, or any other ETF for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional ETFs is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!

Interested in another easy way to trackVanguard Utilities?Add it to your watchlist.

At the time thisarticle was published Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Motley Fool newsletter services have recommended buying shares of Southern. Try any of our Foolish newsletter services free for 30 days.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.

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