If you're interested in broad exposure to the Utilities - Broad segment of the equity market, look no further than the iShares U.S. Utilities ETF (IDU), a passively managed exchange traded fund launched on June 12, 2000.
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
Sector ETFs also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. Utilities - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 14, placing it in bottom 13%.
Index Details
The fund is sponsored by Blackrock. It has amassed assets over $1.47 billion, making it one of the larger ETFs attempting to match the performance of the Utilities - Broad segment of the equity market. IDU seeks to match the performance of the Dow Jones U.S. Utilities Index before fees and expenses.
The Russell 1000 Utilities RIC 22.5/45 Capped Index measures the performance of the utilities sector of the U.S. equity market. It includes companies in the following sectors: electricity and gas, water and multi-utilities.
Costs
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for this ETF are 0.38%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 2.21%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Utilities sector -- about 90.7% of the portfolio.
Looking at individual holdings, Nextera Energy Inc (NEE) accounts for about 11.8% of total assets, followed by Southern (SO) and Duke Energy Corp (DUK).The top 10 holdings account for about 52.38% of total assets under management.
Performance and Risk
The ETF return is roughly 4.17% so far this year and is up roughly 8.51% in the last one year (as of 05/20/2026). In that past 52-week period, it has traded between $102.73 and $120.7.
The ETF has a beta of 0.61 and standard deviation of 15.05% for the trailing three-year period, making it a medium risk choice in the space. With about 48 holdings, it has more concentrated exposure than peers.
Alternatives
iShares U.S. Utilities ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, IDU is an outstanding option for investors seeking exposure to the Utilities/Infrastructure ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
Vanguard Utilities Index Fund ETF Shares (VPU) tracks MSCI US Investable Market Utilities 25/50 Index and the State Street Utilities Select Sector SPDR ETF (XLU) tracks Utilities Select Sector Index. Vanguard Utilities Index Fund ETF Shares has $8.51 billion in assets, State Street Utilities Select Sector SPDR ETF has $22.36 billion. VPU has an expense ratio of 0.09%, and XLU charges 0.08%.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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iShares U.S. Utilities ETF (IDU): ETF Research Reports
This article originally published on Zacks Investment Research (zacks.com).