Electric Utilities Industry ETF

AAA

DEFINITION of 'Electric Utilities Industry ETF'

An exchange-traded fund that invests in companies which generate and distribute electric power. Electric utilities generally account for more than 80% of holdings of the largest utilities ETFs. However, since the balance is taken up by utilities that operate in other sectors such as gas, water and pipelines, these ETFs are better characterized as utilities ETFs.

INVESTOPEDIA EXPLAINS 'Electric Utilities Industry ETF'

Due to the nature of their business, most electric utilities have stable cash flows and high dividend payouts. Such defensive characteristics make utilities ETFs desirable investment candidates during market downturns, as well as during periods of low interest rates, low inflation and economic uncertainty.

RELATED TERMS
  1. Semiconductor Industry ETF

    A sector-following fund that invests in developers, manufacturers ...
  2. Exchange-Traded Fund - ETF

    A security that tracks an index, a commodity or a basket of assets ...
  3. Utility

    1. An economic term referring to the total satisfaction received ...
  4. Defensive Stock

    A stock that provides a constant dividend and stable earnings ...
  5. Utilities Sector

    A category of stocks for utilities such as gas and power. The ...
  6. Index ETF

    Exchange-traded funds that follow a specific benchmark index ...
Related Articles
  1. An Inside Look At ETF Construction
    Mutual Funds & ETFs

    An Inside Look At ETF Construction

  2. Trust In Utilities
    Economics

    Trust In Utilities

  3. Guard Your Portfolio With Defensive ...
    Active Trading

    Guard Your Portfolio With Defensive ...

  4. Why Did ETFs Become So Popular?
    Markets

    Why Did ETFs Become So Popular?

comments powered by Disqus
Hot Definitions
  1. Letter Of Credit

    A letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. ...
  2. Due Diligence - DD

    1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to ...
  3. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  4. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  5. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
  6. Ratio Analysis

    Quantitative analysis of information contained in a company’s financial statements. Ratio analysis is based on line items ...
Trading Center