It can be fun to play what-if games, especially at the end or beginning of the year. If you're an investor interested in the utilities sector, for example, you might wonder how you'd have done, had you plunked $1,000 in the State Street Utilities Select Sector SPDR ETF (XLU +1.53%). It's an exchange-traded fund (ETF) -- a fund that trades like a stock -- and it's focused on utilities businesses.
NYSEMKT: XLU
Key Data Points
Here's the answer to that question: Your investment would now be worth about $2,443. That's pretty good -- more than doubling your money -- and represents an average annual gain of 9.3%. But it's worth noting that had you parked that money in a low-fee S&P 500 index fund instead, your stake would be worth around $3,658. The S&P 500 has simply had an excellent decade, averaging annual gains of more than 13%, well above the historic long-term average of close to 10%.
Image source: Getty Images.
Note, too, that dividends matter. Had you reinvested your dividends along the way, you'd have ended up with $2,728, and an average annual gain of 10.6%. (The S&P 500 with dividends reinvested would have grown to $3,979, at an average annual growth rate of 14.8%.)
To give you an idea of what the State Street Utilities Select Sector SPDR ETF invests in, check out its recent top 10 holdings (out of 31):
|
Stock |
Percent of ETF |
|---|---|
|
NextEra Energy |
12.63% |
|
Constellation Energy |
8.45% |
|
Southern Co. |
7.28% |
|
Duke Energy |
6.90% |
|
American Electric Power |
4.68% |
|
Sempra |
4.38% |
|
Vistra |
3.89% |
|
Dominion Energy |
3.82% |
|
Exelon |
3.33% |
|
Xcel Energy |
3.31% |
Source: Morningstar.com. As of Dec. 29, 2025.
If you're bullish on the utility sector -- perhaps because the rapid spread of artificial intelligence (AI) and data centers is increasing demand for energy -- give this ETF some consideration. Know that it offers a dividend, too, with a recent dividend yield of 2.55%.
