Electric Utilities Industry ETF


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.

BREAKING DOWN '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.

  1. Exchange-Traded Fund (ETF)

    A security that tracks an index, a commodity or a basket of assets ...
  2. Semiconductor Industry ETF

    A sector-following fund that invests in developers, manufacturers ...
  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. Index ETF

    Exchange-traded funds that follow a specific benchmark index ...
  6. Utilities Sector

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