S&P Still Bullish On Utilities ETFs (XLU, VPU)

Utilities ETFs such as the Utilities Select Sector SPDR (NYSE: XLU) had their day in the sun during the risk off environment of 2011, but times have changed this year as investors have prized higher beta fare. Year-to-date, XLU is has traded slightly lower as has the rival Vanguard Utilities ETF (NYSE: VPU).Stretch the time frame out to the past year though and XLU is up almost 16% while VPU is up nearly 15%. Even with the bullish 2011 runs for XLU and VPU in the books, S&P Capital IQ reiterated Overweight ratings on both funds in a recent research note, though the firm notes this year investors have been "moving out of the electric utilities group so as to take advantage of the turnaround in the broader market. In addition, the strong gain in the shares in 2011 also brought about a corresponding decline in the yield from the dividend, which likely lessened the appeal of the shares due to their reduced level of potential total return."Today, XLU sports a dividend yield of 3.92% while VPU yields 3.56%. "Both ETFs are in the top quartile of their asset class for their low volatility, with betas of 0.31 for XLU and 0.35 for VPU, as well as for their low cost, with gross expense ratios of 0.18% for XLU and 0.19% for VPU," S&P said in the note.Looking at the charts, XLU faces resistance at $36 and a move above that area to the ETF's 52-week high at $36.27 could confirm a breakout. VPU has just started to peak above old resistance at $76 and needs to find support in that area before making a run to its 52-week at $77.57.