If you're interested in broad exposure to the Utilities - Broad segment of the equity market, look no further than the Vanguard Utilities Index Fund ETF Shares (VPU), a passively managed exchange traded fund launched on January 26, 2004.
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
Sector ETFs are also funds of convenience, offering many ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Utilities - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 15, placing it in bottom 6%.
Index Details
The fund is sponsored by Vanguard. It has amassed assets over $8.69 billion, making it one of the largest ETFs attempting to match the performance of the Utilities - Broad segment of the equity market. VPU seeks to match the performance of the MSCI US Investable Market Utilities 25/50 Index before fees and expenses.
The MSCI US Investable Market Utilities 25/50 Index comprises of stocks of large, mid-size, and small U.S. companies within the utilities sector.
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 0.09%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 2.63%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Utilities sector -- about 99.9% of the portfolio.
Looking at individual holdings, Nextera Energy Inc (NEE) accounts for about 12.15% of total assets, followed by Southern Co/the (SO) and Duke Energy Corp (DUK).The top 10 holdings account for about 52.07% of total assets under management.
Performance and Risk
So far this year, VPU has added roughly 7.41%, and is up roughly 12.95% in the last one year (as of 07/13/2026). During this past 52-week period, the fund has traded between $177.11 and $205.87.
The ETF has a beta of 0.59 and standard deviation of 15.79% for the trailing three-year period, making it a medium risk choice in the space. With about 70 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard Utilities Index Fund ETF Shares 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, VPU is a great 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.
Fidelity MSCI Utilities Index ETF (FUTY) tracks MSCI USA IMI Utilities Index and the State Street Utilities Select Sector SPDR ETF (XLU) tracks Utilities Select Sector Index. Fidelity MSCI Utilities Index ETF has $2.37 billion in assets, State Street Utilities Select Sector SPDR ETF has $23.66 billion. FUTY has an expense ratio of 0.08%, 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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Vanguard Utilities Index Fund ETF Shares (VPU): ETF Research Reports
This article originally published on Zacks Investment Research (zacks.com).