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The fund generally invests at least 90% of its assets in securities of the underlying index and in depositary receipts representing securities of the underlying index. The underlying index measures the performance of the utilities sector of the U.S. equity market and may include large-, mid- or small-capitalization companies. The fund is non-diversified.

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Waste Management reported worse-than-expected Q2 FY24 results, with sales of $5.402B and adjusted EPS of $1.82. Free cash flow increased 41.1%.

Why Waste Management Shares Are Diving Today

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Uber will benefit from autonomous driving, according to Altimeter CEO Brad Gerstner. It&#39;s a tailwind, not a headwind, he says.

Uber, Apple, Meta And More: CNBC&#39;s &#39;Final Trades&#39;

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Waste Management agreed to acquire Stericycle, adding medical waste &amp; document shredding services. Both stocks have seen gains in past 12 months.

Waste Management To Acquire Stericycle For $62.00/Share In Cash, At 20% Premium

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Waste Management, Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/WM#NYSE">WM</a>) shares are trading lower after the company reported <a target="_blank" href="https://www.benzinga.com/pressreleases/24/07/b39943210/wm-announces-second-quarter-2024-earnings" rel="noreferrer noopener">worse-than-expected second-quarter financial results</a>.
Sales&nbsp;of $5.402 billion missed the consensus of&nbsp;$5.427 billion. Total company revenue grew&nbsp;5.5%, driven primarily by core price of&nbsp;6.8%&nbsp;and increases in the value of the recycled commodities the company sells.
Collection and Disposal yield stood at 4.6%, and Collection and Disposal volume declined 0.3% in the quarter.
Adjusted operating EBITDA grew 10.3% Y/Y to $1.62 billion, with a 130 basis point margin Y/Y expansion to 30.0%.
Adjusted operating EBITDA in the Collection and Disposal business rose $203 million to $1.84 billion, with a margin of 37.3% in the quarter.
Adjusted EPS of $1.82 <a href="https://www.benzinga.com/earnings" target="_blank" rel="noreferrer noopener">missed the consensus of $1.83</a>.
In the first half of the year, net cash from operating activities surged 21.6% to $2.52 billion and free cash flow before high-return sustainability investments increased 41.1% to $1.63 billion.
Jim Fish, WM&#8217;s President and Chief Executive Officer, said, &#8220;Revenue grew by 5.5% this quarter, and our disciplined focus on leveraging our people, technology and processes to reduce our cost to serve continued to drive margin expansion.&#8221;
&#8220;In our renewable energy business, we are scheduled to complete a total of five projects in 2024, with an additional nine projects currently under construction.&#8221;
Outlook: Waste Management reiterated its FY24 outlook of $6.375 billion–$6.525 billion in adjusted operating EBITDA and $2.0 billion–$2.15 billion in free cash flow including sustainability growth investments.
Last month, Waste Management inked a deal to acquire Stericycle, Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/SRCL#NASDAQ">SRCL</a>) for&nbsp;<a target="_blank" href="https://www.benzinga.com/markets/equities/24/06/39137673/waste-management-to-acquire-stericycle-for-62-00share-in-cash-at-20-premium" rel="noreferrer noopener">approximately $7.2 billion, including debt</a>.
Investors can gain exposure to the stock via&nbsp;VanEck Environmental Services ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/EVX#NYSE">EVX</a>) and IShares U.S. Utilities ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IDU#NYSE">IDU</a>).
Price Action: WM shares are down 6.85% at $202.48 at the last check Thursday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Uber Technologies, Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UBER#NYSE">UBER</a>) is Altimeter CEO Brad Gerstner&#8216;s stock pick on the latest edition of CNBC's &#8220;<a href="https://www.cnbc.com/video/2024/06/11/final-trades-apple-uber-meta-and-the-idu.html">Halftime Report Final Trades</a>.&#8221; 
Autonomous driving, Gerstner says, is a tailwind, not a headwind <a href="https://www.benzinga.com/news/24/06/39263866/uber-drivers-employees-or-contractors-california-court-deals-blow-to-gig-economy">for the car service company</a>.
A U.S. appeals court on Monday rejected a bid by Uber and its subsidiary Postmates to revive a challenge to a California law that could force the companies to treat drivers as employees rather than independent contractors.
Stephen Weiss of Short Hills Capital Partners picked Meta Platforms, Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/META#NASDAQ">META</a>), saying he will go with the leader in AI right now.
The U.S. Supreme Court will reportedly consider spiking a multibillion-dollar lawsuit against Meta Platforms that accuses the Mark Zuckerberg-led company of duping investors on the data-harvesting scandal involving British political consultancy <a href="https://www.benzinga.com/general/social-media/24/06/39259832/metas-legal-battle-over-cambridge-analytica-scandal-heads-to-supreme-court">Cambridge Analytica</a>.
Don't forget to check out our <a href="https://www.benzinga.com/premarket/">premarket coverage here</a>
Joshua Brown of Ritholtz Wealth Management said he is staying with Apple Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AAPL#NASDAQ">AAPL</a>).
Apple shares hit new all-time highs on Tuesday after the stock was upgraded by DA Davidson following a series of announcements out of the company's <a href="https://www.benzinga.com/news/24/06/39273468/apple-stock-is-surging-tuesday-whats-going-on">Worldwide Developers Conference 2024</a>.
Shannon Saccocia of NB Private Wealth named iShares U.S. Utilities ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IDU#NYSE">IDU</a>) as her final trade.
Price Action:
<ul>
<li>Uber shares rose 1.4% to close at $69.59 during Tuesday's session.</li>
<li>Meta shares rose 1% to close at $507.47 on Tuesday.</li>
<li>Apple shares jumped 7.3% to settle at $207.15 during Tuesday's session.</li>
<li>iShares U.S. Utilities ETF slipped 0.5% on Tuesday.</li>
</ul>
Check This Out: <a href="https://www.benzinga.com/news/24/06/39269583/top-4-health-care-stocks-that-may-keep-you-up-at-night-this-month">Top 4 Health Care Stocks That May Keep You Up At Night This Month</a>
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Uber, Apple, Meta And More: CNBC's 'Final Trades'

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CNBC Halftime Report Final Trades: Uber Technologies, Apple, Meta Platforms, IShares U.S. Utilities ETF

Stericycle, Inc.&nbsp;(NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/SRCL#NASDAQ">SRCL</a>) shares are trading higher after the company inked a deal to be acquired by Waste Management&nbsp;Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/WM#NYSE">WM</a>) for&nbsp;<a target="_blank" href="https://www.benzinga.com/pressreleases/24/06/b39132848/wm-to-acquire-stericycle-a-leader-in-medical-waste-services-for-7-2-billion" rel="noreferrer noopener">approximately $7.2 billion, including debt</a>.
Stericycle focuses on the collection and disposal of hazardous medical waste and also operates a document shredding <a target="_blank" href="https://www.benzinga.com/markets/equities/24/06/39132054/waste-management-nears-7b-deal-to-acquire-stericycle-report" rel="noreferrer noopener">service known as Shred-It</a>.
As per the terms, the per-share cash acquisition price is $62.00, which represents a premium of 24% to Stericycle&#8217;s 60-day volume-weighted average price as of May 23, 2024 (the last trading day before an article reported that Stericycle was considering a potential sale). The acquisition price represents a premium of 20% to SRCL&#8217;s previous closing price of $51.54.
The deal is unanimously approved by the boards of directors of both companies and is expected to close as early as the fourth quarter of 2024, subject to customary closing conditions.
Jim Fish, President and Chief Executive Officer of Waste Management, said, &#8220;The acquisition of Stericycle is a significant step in advancing this commitment because it broadens the scope of our service offerings, bringing together the leader in solid waste and a premier company in regulated medical waste services.&#8221;
Financial Benefits: Waste Management expects the deal to generate annual run-rate synergies of over $125 million and be accretive to earnings and cash flows within one year of closing.
In the near term, post-buyout completion, Waste Management expects to achieve a net debt-to-EBITDA ratio of approximately 3.4x and a leverage ratio within its targeted net debt-to-EBITDA range of 2.75x to 3.0x approximately 18 months after closing the transaction.
Both companies remain confident in the strength of their businesses and expect to achieve previously announced full-year guidance, excluding the impacts of any transaction-related costs.
Waste Management intends to finance the transaction using a combination of bank debt and senior notes. As of March-end, WM&#8217;s cash and <a target="_blank" href="https://www.benzinga.com//node/38418437" rel="noreferrer noopener">equivalents stood at $322 million</a>.
Waste Management stock has gained more than 25% in the last 12 months. Investors can gain exposure to the stock via IShares U.S. Utilities ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IDU#NYSE">IDU</a>) and TCW Transform Systems ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/NETZ#NYSE">NETZ</a>).
Also Read: <a target="_blank" href="https://www.benzinga.com/markets/equities/24/05/38891801/waste-management-mulls-3b-sale-of-rng-business-report" rel="noreferrer noopener">Waste Management Mulls $3B Sale Of RNG Business: Report</a>
Price Action: SRCL shares are up 15% at $59.27 at the last check Monday.
Photo via Shutterstock

Waste Management Inc (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/WM#NYSE">WM</a>) is reportedly nearing a huge acquisition deal to purchase medical-waste-disposal company Stericycle Inc (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/SRCL#NASDAQ">SRCL</a>) for approximately $7 billion, inclusive of debt.
The acquisition of Bannockburn, Illinois-based Stericycle, which carries over $1 billion in debt, might be announced as early as Monday, according to a <a target="_blank" href="https://www.wsj.com/finance/waste-management-near-deal-to-buy-stericycle-ed064421?mod=hp_lista_pos2" rel="noreferrer noopener">report </a>from the WSJ.
Stericycle's services would enhance Waste Management's capabilities, providing a stronger presence in the medical-waste-disposal sector, which saw increased demand during the COVID-19 pandemic.
Waste Management, based in Houston, operates the largest landfill network in North America with over 250 sites.
Currently, Waste Management's primary revenue comes from its collection operations, which handle solid waste and recyclables from residential and commercial clients, transporting them to various facilities. The company also operates a recycling unit, contributing about 8% to its total revenue by offering communities an alternative to landfill disposal, as per the report.
Stericycle focuses on the collection and disposal of hazardous medical waste and also operates a document shredding service known as Shred-It.
Also Read: <a target="_blank" href="https://www.benzinga.com/markets/equities/24/05/38891801/waste-management-mulls-3b-sale-of-rng-business-report" rel="noreferrer noopener">Waste Management Mulls $3B Sale Of RNG Business: Report</a>
Stericycle&nbsp;is valued at approximately $4.8 billion. For Waste Management, with a market value close to $85 billion, the Stericycle acquisition represents a relatively small investment.
Stericycle&#8217;s stock has risen over 18% in the last 12 months.
The M&amp;A market in the U.S. is seeing renewed activity after a period of stagnation caused by high interest rates and other factors.
Recent notable deals include ConocoPhillips&#8217; (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/COP#NYSE">COP</a>) <a target="_blank" href="https://app.grammarly.com/ddocs/2491069576" rel="noreferrer noopener">acquisition of </a>Marathon Oil Corp (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/MRO#NYSE">MRO</a>) and T-Mobile US Inc (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TMUS#NASDAQ">TMUS</a>) <a target="_blank" href="https://www.benzinga.com/trading-ideas/24/05/39089568/t-mobiles-game-changing-4-4-billion-deal-with-u-s-cellular-sets-new-record-highs" rel="noreferrer noopener">$4.4 billion purchase of most</a> of United States Cellular Corp (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/USM#NYSE">USM</a>) operations.
Waste Management stock has gained more than 27% in the last 12 months. Investors can gain exposure to the stock via IShares U.S. Utilities ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IDU#NYSE">IDU</a>) and TCW Transform Systems ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/NETZ#NYSE">NETZ</a>).
Price Action: SRCL shares closed higher by 4.54% at $51.54 on Friday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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Waste Management Nears $7B Deal To Acquire Stericycle: Report

Waste Management, Inc.&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/WM#NYSE">WM</a>) reportedly explored divestment of its renewable natural gas business that could be worth about $3 billion.
The company is working with&nbsp;JP Morgan Chase &amp; Co.&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/JPM#NYSE">JPM</a>) to gauge interest from potential energy companies and private equity firms, reported Reuters.
As per&nbsp;the report, Waste Management aims to offload the rights to develop RNG operations on 115 landfills that it owns, adding the company would retain ownership of the landfills.&nbsp;
If the deal talks conclude successfully, it would mark one of the biggest-ever asset sales in the nascent U.S. RNG industry, as per the report.
The company&#8217;s RNG unit currently generates about $150 million of EBITDA and projects that&nbsp;the unit would&nbsp;contribute over $500 million of adjusted earnings before interest, tax, depreciation and amortization (EBITDA) by 2026.&nbsp;
As per&nbsp;the report, Waste Management&nbsp;is hoping&nbsp;the unit&#8217;s valuation&nbsp;to&nbsp;be comparable to, or exceed,&nbsp;the earnings multiple at which Morrow Renewables sold RNG operations at landfills to&nbsp;Enbridge Inc&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/ENB#NYSE">ENB</a>)&nbsp;in late 2023.&nbsp;
Investors can gain exposure to the stock via&nbsp;VanEck Environmental&nbsp;Services ETF&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/EVX#NYSE">EVX</a>) and&nbsp;IShares U.S.&nbsp;Utilities ETF&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IDU#NYSE">IDU</a>).
Price Action: WM shares are up 0.17% at $212.56 premarket at&nbsp;the last check Friday.

Asset Sales

Waste Management Mulls $3B Sale Of RNG Business: Report

On CNBC's &#8220;<a href="https://www.cnbc.com/video/2024/05/09/final-trades-live-nation-delta-air-lines-and-splv.html">Halftime Report Final Trades</a>,&#8221; Stephen Weiss of Short Hills Capital Partners picked Taiwan Semiconductor Manufacturing Company Limited (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/TSM#NYSE">TSM</a>), which released quarterly results on April 10.
TSMC experienced a 60% surge in April sales to 236 billion New Taiwan dollars ($7.3 billion), driven by ongoing demand for artificial intelligence and signs of recovery in consumer electronics.
Shannon Saccocia of NB Private Wealth named iShares U.S. Utilities ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IDU#NYSE">IDU</a>) as her final trade.
Don't forget to check out our <a href="https://www.benzinga.com/premarket/">premarket coverage here</a>
Jim Lebenthal of Cerity Partners picked Applied Materials, Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AMAT#NASDAQ">AMAT</a>).
Applied Materials is scheduled to hold a webcast to discuss its second quarter of fiscal 2024 financial results on Thursday, May 16 at 4:30 p.m. ET. Analysts expect the company to report quarterly earnings at $1.99 per share, up from $1.78 per share in the year-ago period. Applied Materials is projected to post revenue of $6.54 billion for the quarter.
Bill Baruch named VanEck Gold Miners ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GDX#NYSE">GDX</a>), saying it could be the &#8220;time to shine.&#8221;
Price Action:
<ul>
<li>Taiwan Semiconductor shares rose 4.5% to close at $149.26 on Friday.</li>
<li>iShares U.S. Utilities ETF slipped 0.1% during Friday's session.</li>
<li>Applied Materials shares rose 1.7% to settle at $209.73 on Friday.</li>
<li>VanEck Gold Miners ETF declined 0.3% during Friday's session.</li>
</ul>
Check This Out: <a href="https://www.benzinga.com/news/24/05/38759507/top-3-industrials-stocks-that-may-collapse-this-month">Top 3 Industrials Stocks That May Collapse This Month</a>
Image: Shutterstock

AMAT

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Taiwan Semiconductor, Applied Materials And More On CNBC's 'Final Trades'

UBS Global Research has revised its outlook for the &quot;Big Six&quot; tech companies &mdash; Apple, Amazon, Google-parent Alphabet, Meta, Microsoft, and Nvidia &mdash; from &quot;Overweight&quot; to &quot;Neutral&quot; according to a recent statement by Jonathan Golub, the chief U.S. equity strategist at UBS Investment Bank, according to a source.
In his explanation, Golub said that the downgrade is not based on rich valuations or concerns about the sustainability and momentum of the AI technology. Instead, he pointed out tough comps compared to the pandemic period and cyclical pressures as the headwinds. Golub highlighted that the rapid earnings growth recorded by these tech giants over the past year is now ebbing.
<h3>Will Easy Comps Faced by Big Tech Go Away in 2025?</h3>
UBS indicated that the pandemic initially triggered increased demand for PCs, online shopping and gaming, thus helping those tech stocks&#39; earnings. A reduction in costs and easy comparisons boosted these companies&#39; profits, which peaked in the fourth quarter of 2023. But this jump will be followed by a decline in earnings as the economy gradually gains momentum.
Golub also mentioned that the current analysis does not overlook the influence of AI, cloud computing, or bitcoin mining on tech earnings. The research division of UBS predicts a decline in these companies&#39; EPS growth to 16% in the first quarter of 2025, down from 42% in the corresponding period of this year. UBS expects earnings to normalize going forward.
Let&#39;s discuss some examples:
Nvidia&#39;s&nbsp;(NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/nvda#NASDAQ">NVDA</a>) expected sales growth is 17.94% for 2025 versus 74.07% for 2024. Its 2025 expected earnings growth is 13.88% versus 2024&#39;s expectation of 84.72%.
Meta&#39;s&nbsp;(NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/meta#NASDAQ">META</a>) expected sales growth is 12.79% for 2025 versus 18.19% for 2024. Its 2025 expected earnings growth is 15.18% versus 2024&#39;s expectation of 35.71%.
Alphabet&#39;s&nbsp;(NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/goog#NASDAQ">GOOG</a>) expected sales growth is 11.07% for 2025 versus 13.18% for 2024. Its 2025 expected earnings growth is 14.58% versus 2024&#39;s expectation of 16.90%.
Amazon&#39;s&nbsp;(NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/amzn#NASDAQ">AMZN</a>) expected sales growth is 11.59% for 2025 versus 11.61% for 2024. Its 2025 expected earnings growth is 30.36% versus 2024&#39;s expectation of 41.38%.
<h3>Time for Non-Cyclical ETFs?</h3>
According to UBS, EPS growth for non-tech companies is expected to surpass that of the Big Six over the next year, as these firms were less affected by the pandemic-induced boom.
The Federal Reserve is also likely to start cutting rates in late 2024 due to the likelihood of cooling inflation. The U.S. economy is showing signs of resilience.
This perspective has bolstered investor confidence, leading to increased investments in sectors like financials and industrials. These areas are deemed safe havens amid the likely Fed rate cuts. Other sectors like consumer staples, utilities and healthcare also appear to be safe bets.
<h3>ETFs in Focus</h3>
Against this backdrop, below we highlight a few safe sector ETFs like Health Care Select Sector SPDR ETF (ARCA:XLV), Industrial Select Sector SPDR ETF (ARCA:XLI), Financial Select Sector SPDR ETF (ARCA:XLF), Consumer Staples Select Sector SPDR ETF (ARCA:XLP) and iShares U.S. Utilities ETF (ARCA:IDU).
<a href="https://www.zacks.com/stock/news/2260842/beyond-big-six-why-choose-non-cyclical-sector-etfs?cid=CS-BENZ-FT-etf_news_and_commentary-2260842">To read this article on Zacks.com click here.</a>

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Beyond "Big Six:" Why Choose Non-Cyclical Sector ETFs?

According to Bill Baruch of Blue Line Capital, Leidos Holdings, Inc. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/ldos#NYSE">LDOS</a>) is &quot;breaking out, trying to break out above its 2020 high.&quot; The company reported &quot;great earnings&quot; <a href="https://www.benzinga.com/news/earnings/24/02/37090858/leidos-surpasses-q4-expectations-eyes-solid-growth-in-2024-with-revenue-and-eps-surge"> report last week, he added. </a>
Baruch made the comments on CNBC&rsquo;s &quot;<a href="https://www.cnbc.com/video/2024/02/16/final-trades-leidos-holdings-vulcan-materials-and-idu.html">Halftime Report Final Trades</a>.&quot; Reston, Virginia-based Leidos reported fourth-quarter (Q4) 2023 revenue growth of 8% year-over-year to $3.98 billion, beating the consensus of $3.80 billion. 
Leidos clocked an adjusted EPS of $1.99, up 9% year-over-year, beating the consensus of $1.74. It expects fiscal 2024 revenue of $15.70 billion-$16.10 billion and adjusted EPS of $7.50 &ndash; $7.90.
Don&rsquo;t forget to check out our <a href="https://www.benzinga.com/premarket/"> premarket coverage here </a> 
Shannon Saccocia of NB Private Wealth named iShares U.S. Utilities ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/idu#NYSE">IDU</a>) as her final trade.
Joe Terranova of Virtus Investment Partners picked Vulcan Materials Company (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/vmc#NYSE">VMC</a>).
Vulcan Materials reported better-than-expected fourth-quarter financial results. Revenue of $1.83 billion was in line with the consensus. Adjusted EPS of $1.46 beat the consensus of $1.39. The construction materials provider said it expects net earnings of $1.07 billion-$1.19 billion and adjusted EBITDA of $2.15 billion-$2.30 billion. It expects to spend $625 million-$675 million for maintenance and <a href="https://www.benzinga.com/news/earnings/24/02/37182778/why-construction-materials-provider-vulcan-shares-are-surging-today">growth projects in 2024</a>.
<h3>Price Action:</h3>
<ul>
<li>Leidos shares gained 1.3% to close at $123.83 on Friday.</li>
<li>iShares U.S. Utilities ETF slipped 0.01% during Friday&rsquo;s session.</li>
<li>Vulcan Materials shares jumped 5.2% to settle at $255.15 on Friday.</li>
</ul>
Check This Out: <a href="https://www.benzinga.com/news/24/02/37156040/top-4-health-care-stocks-you-may-want-to-dump-in-february"> Top 4 Health Care Stocks You May Want To Dump In February </a>
Image: Pixabay

LDOS

Leidos Holdings, Vulcan Materials And More On CNBC's 'Final Trades'

CNBC Halftime Report Final Trades: Leidos Holdings, Vulcan Materials, IShares U.S. Utilities ETF

JPMorgan Chase recently reported second-quarter results, with both revenue and earnings exceeding Wall Street's expectations. But CEO Jamie Dimon is erring on the side of caution.
"There are still salient risks in the immediate view," he said in the earnings press release.
"Consumers are slowly using up their cash buffers, core inflation has been stubbornly high — increasing the risk that interest rates go higher and stay higher for longer — quantitative tightening of this scale has never occurred, fiscal deficits are large and the war in Ukraine continues, which in addition to the huge humanitarian crisis for Ukrainians, has large potential effects on geopolitics and the global economy."
It's not a rosy picture. In the earnings conference call, Dimon added that "headwinds are substantial and somewhat unprecedented."
So here's a closer look at three key risk factors Dimon highlighted and how investors can hedge against them.
<h2 class="wp-block-heading">High Core Inflation</h2>
In June, the consumer price index (CPI) rose 3% from a year ago, marking the smallest 12-month increase since March 2021. But core CPI — which excludes food and energy — increased 4.8% year over year.
Should core inflation persist at the "stubbornly high" levels Dimon cautioned about, your hard-earned money could progressively lose value because of the eroding effects of inflation.
Legendary investor Jim Rogers recently said that "the best place to be when you have inflation is real assets" like commodities.
Investors can gain exposure to commodities like gold, oil and agricultural products through exchange-traded funds (ETFs) such as SPDR Gold Shares (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GLD#NYSE">GLD</a>), United States Oil Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/USO#NYSE">USO</a>) and Invesco DB Agriculture Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DBA#NYSE">DBA</a>).
Real estate is another popular hedge against rising prices. When inflation occurs, the cost of raw materials and labor goes up, so constructing new properties becomes more expensive, which contributes to the appreciation of property values.
While buying a house can be a challenge in today's environment, new companies have innovated ways for people to <a href="https://www.benzinga.com/alternative-investments/platform/arrived-homes">earn passive income</a> in the real estate market. Here's how to <a href="https://www.benzinga.com/real-estate/22/10/29268850/bezos-backed-startup-lets-you-become-a-landlord-with-100-dollars">invest in rental properties with as little as $100</a> while staying completely hands-off.
<h2 class="wp-block-heading">Check out:</h2>
<ul>
<li>Passive income investments are one of the most trusted methods for riding out a recession so it's no surprise that people are turning to <a href="https://www.benzinga.com/real-estate/23/05/32554601/want-to-grow-your-wealth-passively-these-high-yield-real-estate-notes-might-be-your-holy-grail">high-yield notes that pay a fixed 7.5% to 9%.</a></li>
<li>Blackstone made a $13 billion bet on the growth in student housing. Here's how you can <a href="https://www.benzinga.com/real-estate/23/06/33080017/blackstone-bet-13-billion-on-the-impending-student-housing-price-surge-these-investors-are-doing-the">carve out your own piece of the student housing market with just $500</a>.</li>
</ul>
<h2 class="wp-block-heading">Quantitative Tightening</h2>
Quantitative tightening is a monetary policy that central banks use to reduce the money supply. They accomplish this by selling securities such as government bonds. As market participants buy the securities, the amount of money circulating in the economy decreases. This leads to higher interest rates, which can slow down economic activity.
The U.S. Federal Reserve has embraced quantitative tightening to tame rampant inflation. Since March 2022, the federal funds rate has been increased by 500 basis points.
While many businesses fear high-interest rates because they lead to increased borrowing costs and reduced consumer spending, it can be a different story for banks.
Banks make money from the spread between the interest rates at which they borrow and lend. When interest rates rise, it can lead to an expansion of their net interest margins.
JPMorgan's results illustrate this point. In the second quarter, the bank's net interest income surged 44% year over year to $21.9 billion.
Other than considering bank stocks, investors can also check out savings accounts as a way to ride the rate wave. Because of the Federal Reserve's aggressive rate hikes, there are now plenty of <a href="https://www.benzinga.com/money/best-savings-accounts">high-yield savings accounts</a> to choose from.
<h2 class="wp-block-heading">War In Ukraine</h2>
The Russia-Ukraine war has sent shockwaves across global markets. Geopolitical conflicts could disrupt supply chains, increase energy prices and create widespread uncertainty.
When tensions escalate, investors often turn to safe-haven assets. Gold is a classic example, as it has been considered a store of value in times of crisis.
U.S. Treasury bonds are also worth considering — they are backed by the U.S. government.&nbsp;
In addition, investors may also want to look into defensive stocks, which usually come from sectors less likely to be affected by economic downturns. Notable examples include consumer staples, utilities and healthcare — sectors where established companies experience consistent demand for their products and services, regardless of economic conditions.
Investors can access these sectors via ETFs such as Consumer Staples Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLP#NYSE">XLP</a>), iShares U.S. Utilities ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IDU#NYSE">IDU</a>) and Vanguard Healthcare ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VHT#NYSE">VHT</a>). Meanwhile, companies included in these ETFs could provide a starting point for further research.
<h2 class="wp-block-heading">Read next:</h2>
<ul>
<li><a href="https://www.benzinga.com/real-estate/22/10/29268850/bezos-backed-startup-lets-you-become-a-landlord-with-100-dollars">Bezos-Backed Startup Lets You Become A Landlord With $100</a></li>
<li><a href="https://www.benzinga.com/real-estate/23/05/32537165/elon-musk-is-bullish-on-austin-heres-how-to-invest-in-the-citys-growth-before-he-floods-it-with-new">Elon Musk Is Bullish On Austin. Here&#8217;s How To Invest In The City&#8217;s Growth Before He Floods It With New Tech Workers</a></li>
</ul>
Photo: Steve Jurvestson via&nbsp;<a href="https://www.flickr.com/photos/jurvetson/8362210873/in/photolist-dJWvXx-bg6vWP-DjqVuL-q15ADn-cgsPXw-jxvDvY-eF1K2G-jxwPGQ-YDDCdS-eF2b7b-bjFgVe-eF1Q6w-eEY6rh-ZFCTDm-eEYdVY-ZFCVmj-YDDyVj-LPVSd6-ZFCXJW-eEUB38-YCKtHZ-eEUBQr-YDDHYj-YDDNym-chKEyU-chKH5E-chKEbw-chKE9Y-chKGJC-eEUAcH-chKHtQ-chKFVu-chKFsm-eEUJJV-chKEaQ-chKGo9-eEUEiv-eF1P8f-eF1FEo-eESvV2-eEUFUk-eEUDuD-eEURi8-eF1Mv3-eF1ULL-eEUXQc-chKF5q-eEV1hp-eF1VJh-eEYxZh" target="_blank" rel="noreferrer noopener">Flickr Creative Commons</a>

'Headwinds Are Substantial': Jamie Dimon Just Flagged A Long List Of Serious Dangers To The US Economy — Here Are 3 'Salient' Risks And How To Defend Against Them

Modern portfolio theory (MPT) is evolving, and investors can gain exposure to that evolution with a new exchange-traded fund. The iSectors Post-MPT Growth ETF (NASDAQ: PMPT) debuted Wednesday as the first ETF from iSectors, which launched the fund partnership with Virtus Investment Partners (NASDAQ: <a class="ticker" href="/stock/vrts#NASDAQ">VRTS</a>).
<h3>Post-Modern Portfolio Theory And PMPT</h3>
&ldquo;PMPT is an actively managed ETF based on the firm&rsquo;s flagship investment model, the iSectors Post-MPT Growth Allocation. PMPT aims to optimize investor return and minimize the downside risk. PMPT seeks to improve upon the principles of Modern Portfolio Theory (MPT) by applying modern research and technology. To achieve this, PMPT invests in nine low-correlated asset classes, including basic materials, bonds, energy, financials, gold, healthcare, real estate, technology and utilities to ensure a high level of diversification,&rdquo; <a href="http://www.isectorsetfs.com/">according to iSectors</a>.
<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/trading-ideas/long-ideas/16/08/8361087/these-arent-middling-returns-with-this-mid-cap-etf">These Aren't Middling Returns With This Mid-Cap ETF</a></bzrelatedlink>
The ETF follows the increasingly popular ETF of ETFs structure as all of PMPT&#39;s holdings are other ETFs.
<h3>An ETF Of ETFs</h3>
PMPT&#39;s largest holdings include the Market Vectors Gold Miners ETF (NYSE: <a class="ticker" href="/stock/gdx#NYSE">GDX</a>), iShares Barclays 20+ Yr Treas.Bond (ETF) (NASDAQ: <a class="ticker" href="/stock/tlt#NASDAQ">TLT</a>) and the Vanguard REIT Index Fund (NYSE: <a class="ticker" href="/stock/vnq#NYSE">VNQ</a>).
 Other holdings in the new ETF include the iShares Dow Jones US Utilities (ETF) (NYSE: <a class="ticker" href="/stock/idu#NYSE">IDU</a>) and the iShares Dow Jones US Financial (ETF) (NYSE: <a class="ticker" href="/stock/iyf#NYSE">IYF</a>).
PMPT &ldquo;may be invested up to 30 percent at any one time into any single class, with the exception of government bonds, to which the models may allocate up to 50 percent. It remains 100 percent invested at all times,&rdquo; according to iSectors. 
PMPT can invest in leveraged ETFs and currently counts one such fund among its holdings.
&ldquo;Modern Portfolio Theory assumes that investors are risk averse, markets are efficient and the allocation of an investment portfolio is more important than individual security selection. MPT favors long-term investing, diversification that seeks an asset allocation with the highest return per any given level of risk,&rdquo; according to <a href="http://www.etftrends.com/2016/08/a-new-active-etf-tries-to-improve-on-modern-portfolio-theory/">ETF Trends</a>.
Do you have ideas for articles/interviews you'd like to see more of on Benzinga? Please email <a href="mailto:feedback@benzinga.com">feedback@benzinga.com</a> with your best article ideas. One person will be randomly selected to win a $20 Amazon gift card!

Bonds

Specialty ETFs

New ETFs

iShares Dow Jones US Financial Sector Index Fund

iShares Trust Barclays 20+ Year Treasury Bond Fund

VRTS

Go Post-Modern With This New ETF

For as much as financial services exchange-traded funds want the Federal Reserve to raise interest rates, utilities want the Fed to continue its near zero interest rate policy for as long as possible.

	The reasoning is simple. Few sectors are as rate-sensitive as utilities. Recent showings by the Utilities SPDR (ETF) (NYSE: <a class="ticker" href="/stock/xlu#NYSE">XLU</a>) and the iShares Dow Jones US Utilities (ETF) (NYSE: <a class="ticker" href="/stock/idu#NYSE">IDU</a>) confirm as much, as do historical data that underscore the vulnerability of utilities stocks in rising rate environments.
<h3>Sectors And Fed Rates</h3>
&quot;Telecom was the worst or second worst performing sector in terms of average cumulative returns in 6 out of the 12 months following Fed liftoff,&rdquo; said Bank of America in a <a href="http://www.benzinga.com/analyst-ratings/analyst-color/15/09/5834437/dont-mess-with-these-etfs-if-interest-rates-rise#ixzz3lxABw4Eu">note out </a>earlier this month.
<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/analyst-ratings/analyst-color/15/09/5846712/what-stocks-have-done-after-every-rate-hike-in-u-s-histo">What Stocks Have Done After Every Rate Hike In U.S. History</a></bzrelatedlink>
 The bank added, &ldquo;Utilities were lackluster throughout the 12 months after Fed liftoff.&rdquo; In other words, it is easy to <a href="http://www.benzinga.com/trading-ideas/long-ideas/15/09/5845234/ahead-of-the-fed-investors-ditch-utilities-etfs">figure out why </a>IDU is up nearly 3 percent over the past week: The Fed did not increase interest rates.
 That does not mean the central bank will not do so next month, in December or sometime in the first half of 2016. However, some market strategists see utilities as a sound near-term bet.
<h3>Utilities' Advantage</h3>
&ldquo;We would revisit more rate-sensitive parts of the market, such as U.S. utilities. Were interest rates rising, one would expect these &lsquo;bond market proxy&rsquo; segments to suffer. However, with long-term rates clearly stuck, utilities look less vulnerable, particularly as this sector has dramatically underperformed the rest of the market this year.
&ldquo;At these levels, we would bring exposure back up toward a market weight,&rdquo; said BlackRock Global Chief Investment Strategist Russ Koesterich <a href="http://www.blackrock.com/investing/insights/weekly-commentary">in a note out Monday</a>.
The benefits remain striking for investors willing to consider an ETF like IDU at current levels.
 First, there is the yield. IDU&#39;s trailing 12-month dividend yield of 3.53 percent is more than 130 basis points above where 10-year Treasury yields closed Monday. Second, investors will not be forced to pay a premium valuation for utilities&#39; low volatility and robust yields.
Utilities stocks are inexpensive relative to the S&amp;P 500, a rarity for the ultra-defensive sector that usually forces investors to pay up for the luxury of that defensive posture. XLU&#39;s estimated 2015 price-to-earnings ratio is 15.5 compared to 16.7 for the S&amp;P 500, according to AltaVista.
<h3>Another Look At IDU Specifically</h3>
IDU, which is home to 60 stocks, has a three-year standard deviation of 14 percent and a beta against the S&amp;P 500 of just 0.29, <a href="http://www.ishares.com/us/products/239524/IDU">according to iShares data</a>.
 Beta measures a security&#39;s relationship with the market as a whole, meaning a stock or ETF with a beta of one essentially moves in lockstep with the broad market.
Image Credit: <a href="https://pixabay.com/en/light-bulb-light-glow-brightness-491774/">Public Domain</a>

Federal Reserve

Intraday Update

Fed Turned On The Lights For Utilities ETFs

One way or the other, the Federal Reserve will be making a decision on interest rates on Thursday. Either benchmark U.S. interest rates are going to continue hovering near or zero or, as some market participants expect, those rates will rise by 25 basis points.

	Examining recent flows data for select rate-sensitive exchange traded funds is a task unlikely to give investors a clear idea regarding what the Fed is going to decide. For example, the high-yields and bond-like properties of preferred stocks would seemingly make that asset class vulnerable to higher interest rates, but investors have recently been pouring money into the iShares U.S. Preferred Stock ETF (NYSE: <a class="ticker" href="/stock/pff#NYSE">PFF</a>) and the PowerShares Preferred Portfolio (NYSE: <a class="ticker" href="/stock/pgx#NYSE">PGX</a>), among&nbsp;<a href="http://www.benzinga.com/trading-ideas/long-ideas/15/09/5837534/preferred-stock-etfs-provide-potential-fed-clues">other preferred ETFs</a>.

	Conversely, investors have been far less sanguine about utilities ETFs. In fact, they have been downright skittish as highlighted by the $549.3 million in month-to-date departures from the Utilities Select Sector SPDR (NYSE: <a class="ticker" href="/stock/xlu#NYSE">XLU</a>), the largest utilities ETF.
<h3>
	Why This Makes Sense</h3>

	Investors&#39; angst as it pertains to the utilities ahead of potentially hawkish moves by the Fed makes sense. In the case of XLU, it is the most negatively correlated to interest rates of the nine sector SPDR ETFs. History confirms the laggard status of utilities stocks following interest rate increases.

	&quot;Telecom was the worst or second worst performing sector in terms of average cumulative returns in 6 out of the 12 months following Fed liftoff,&rdquo; said Bank of America in a&nbsp;<a href="http://www.benzinga.com/analyst-ratings/analyst-color/15/09/5834437/dont-mess-with-these-etfs-if-interest-rates-rise#ixzz3lxABw4Eu">note out last week</a>. The bank added &ldquo;utilities were lackluster throughout the 12 months after Fed liftoff.&rdquo;

	Investors&#39; September disdain for utilities ETFs has not been limited to XLU. The Vanguard Utilities ETF (NYSE: <a class="ticker" href="/stock/vpu#NYSE">VPU</a>) and the iShares U.S. Utilities ETF (NYSE: <a class="ticker" href="/stock/idu#NYSE">IDU</a>) have lost $30 million combined this month.

	Some traders are even outright betting against utilities ETFs. Short interest in XLU was recently as high as 36 percent of shares outstanding, according to AltaVista Research, the&nbsp;<a href="http://www.etfresearchcenter.com/archives/Sector_SPDR_Analyzer_090115_ERC.pdf">third-highest total</a> among the nine SPDRs.

	Interestingly, utilities stocks are inexpensive relative to the S&amp;P 500, a rarity for the ultra-defensive sector that usually forces investors to pay-up for the luxury of that defensive posture. XLU&#39;s estimated 2015 price-to-earnings ratio is 15.5 compared to 16.7 for the S&amp;P 500, according to AltaVista.

	&ldquo;Environmental regulations and distributed generation represent dual threats to profitability-- witness the declining trend in Return on Equity and margins over the past few years, which may appear small but are forecast to result in less than 1% earnings growth between 2010-15E. That said, the P/E ratio has come off its highs from earlier this year, so the sector could get another look from value and income value investors, especially if the Fed delays raising,&rdquo; said AltaVista of XLU.

	The research firm has a Neutral rating on XLU.

Short Ideas

iShares S&P US Preferred Stock Index Fund

Ahead Of The Fed, Investors Ditch Utilities ETFs

Ten-year Treasury yields have surged nearly 28 percent over the past six months, a move that helps explain why the Utilities Select Sector SPDR (NYSE: <a class="ticker" href="/stock/xlu#NYSE">XLU</a>) is down 9 percent this year. Among the nine sector SPDR exchange traded funds, only the Energy Select Sector SPDR (NYSE: <a class="ticker" href="/stock/xle#NYSE">XLE</a>) has been worse this year.

	That is a stark reversal of course from 2014 when XLU was the top-performing SPDR. However, with risk-off recently becoming the name of the game for investors, utilities stocks and ETFs are getting some of their groove back.

	In what is turning out to be another turbulent day for U.S. stocks, three of the top 15 ETFs in terms of percentage gains are utilities funds &ndash; XLU, the Vanguard Utilities ETF (NYSE: <a class="ticker" href="/stock/vpu#NYSE">VPU</a>) and the iShares US Utilities ETF (NYSE: <a class="ticker" href="/stock/idu#NYSE">IDU</a>).

	Some investors have been prepared for utilities ETFs to bounce back as inflows to the previously moribund funds have picked up this month. For example, investors have put $315 million in new capital to work in XLU this month. That after the largest utilities ETF lost more than $1 billion in the first six months of the year. In the first half of the year, investors also yanked more than $1.2 billion from IDU.

	Ahead of utilities sector earnings, there has also been evidence of traders buying calls on some XLU constituents in anticipation of a rebound.

	&quot;The recent upside call activity in XLU is clearly capturing the upcoming quarterly earnings cycle in the sector, and when we look at the top holdings, we can see that these names all report quarterly results prior to August expiration: (DUK (8.74%), 8/6/15), (NEE (8.45%), 7/29/15), (D (7.70%), 8/5/15), SO (7.39%), 7/29/15), EXC (5.25%), 7/29/15),&quot; according to a recent note from Street One Financial.

	As that note indicates, three of XLU&#39;s top 10 holdings (a trio that combine for close to 20 percent of the ETF&#39;s weight) report earnings on Wednesday.

	Falling Treasury yields serve another purpose for rate-sensitive fare such as utilities ETFs. While those falling yields mean higher prices, those lower yields also make the utilities sector&#39;s dividends more attractive. For example, XLU has a trailing 12-month dividend yield of 3.64 percent, or about 140 basis points above where 10-year Treasury yields currently reside.

	Long-term investors looking to save a few bucks on fees can opt for VPU or the Fidelity MSCI Utilities Index ETF, both of which charge just 0.12 percent per year compared to XLU&#39;s 0.15 percent. However, XLU is the most heavily traded utilities ETF, has narrow spreads and has the most robust options market among utilities ETFs.

Dividends

Seeking Refuge In Utility ETFs

The utility sector has cooled significantly this year as rising U.S. Treasury yields threaten to sink share prices even lower. The Utility Select Sector SPDR (Utilities SPDR (ETF) (NYSE: <a class="ticker" href="/stock/xlu#NYSE">XLU</a>)) is the largest fund in this space, with over $6.3 billion in total assets.
<h3>A Closer Look At XLU</h3>
 XLU tracks 32 large-cap utility companies engaged in traditional electric and gas services.
 Top holdings in this ETF include:
<ul>
<li>Duke Energy Corp (NYSE: <a class="ticker" href="/stock/duk#NYSE">DUK</a>)</li>
<li>NextEra Energy Inc (NYSE: <a class="ticker" href="/stock/nee#NYSE">NEE</a>)</li>
<li>Dominion Resources, Inc. (NYSE: <a class="ticker" href="/stock/d#NYSE">D</a>)</li>
</ul>

The majority of the holdings within XLU are prized for their high dividend streams, which translates to an aggregate 30-day SEC yield of 3.43 percent. In addition, this fund charges a net expense ratio of 0.15 percent.
<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/general/education/15/05/5529717/are-electric-utilities-actually-embracing-disruptive-start-ups">Are Electric Utilities Actually Embracing Disruptive Startups?</a></bzrelatedlink>
	Over the last four months, the share price of XLU has been sinking and is now down more than 10 percent from its 2015 high. To put that in context, XLU has lost over 6 percent in total return and is the worst performing sector in the S&amp;P 500 Index this year.

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	The primary cause of this drop can be attributed to the volatility in interest rates. The CBOE Interest Rate 10 Year T Note (INDEXCBOE: TNX) has risen from a low of 1.65 percent to a current yield near 2.27 percent.
<h3>Utility Sector Profile</h3>
	Utility stocks are typically quite sensitive to interest rate fluctuations because their business models are heavily dependent on capital financing. In addition, these stocks are seen as a &ldquo;safety&rdquo; trade similar to Treasury bonds, which makes them more favorable in a falling interest rate environment.

	With the Federal Reserve mulling its first interest rate hike, the rapid price swings in U.S. Treasury yields may become a significant factor in capping gains across this sector.

	Yet despite this drop, ETF investors have been reluctant to throw in the towel on utility stocks. XLU has only seen <a href="http://www.etf.com/etfanalytics/etf-fund-flows-tool">$580 million</a> in outflows this year, which is relatively minor for a fund of this size.

	To put that in perspective, the Financial Select Sector SPDR (Select Sector Financial Slct Str SPDR Fd (NYSE: <a class="ticker" href="/stock/xlf#NYSE">XLF</a>)) has experienced over $2.9 billion in outflows so far in 2015 and XLF is trading near the flat line for the year.

	Other similar ETFs that have been impacted by this volatility include:
<ul>
<li>Vanguard Utilities ETF (NYSE: <a class="ticker" href="/stock/vpu#NYSE">VPU</a>)</li>
<li>iShares Dow Jones US Utilities (ETF) (NYSE: <a class="ticker" href="/stock/idu#NYSE">IDU</a>)</li>
</ul>

 These two funds, along with XLU, are currently trading below their long-term moving averages and are exhibiting weak price action relative to the broad-market indices.
Image Credit: <a href="http://pixabay.com/en/power-pole-electricity-utility-pole-492085/">Public Domain</a>

Broad U.S. Equity ETFs

Utility ETFs Face Difficult Interest Rate Environment

Here is the ETF Professor's ETF Watch List for Tuesday, September 24, 2013.

Give the Direxion Daily Gold Miners Bear 3X Shares (NYSE: <a class="ticker" href="/stock/dust#NYSE">DUST</a>) a look.

Check in with the Vanguard FTSE Europe ETF (NYSE: <a class="ticker" href="/stock/vgk#NYSE">VGK</a>).

The iShares US Utilities ETF (NYSE: <a class="ticker" href="/stock/idu#NYSE">IDU</a>) rose on big volume Monday.

Keep an eye on the Global X Social Media Index ETF (NYSE: <a class="ticker" href="/stock/socl#NYSE">SOCL</a>).

Emerging markets plays of the day: Market Vectors Egypt ETF (NYSE: <a class="ticker" href="/stock/egpt#NYSE">EGPT</a>), Global X FTSE Colombia 20 ETF (NYSE: <a class="ticker" href="/stock/gxg#NYSE">GXG</a>) and the iShares China Large-Cap ETF (NYSE: <a class="ticker" href="/stock/fxi#NYSE">FXI</a>).

Forex play of the day: ProShares UltraShort Euro (NYSE: <a class="ticker" href="/stock/euo#NYSE">EUO</a>).

Bond play of the day: Vanguard Short-Term Bond ETF (NYSE: <a class="ticker" href="/stock/bsv#NYSE">BSV</a>).

Emerging Market ETFs

Currency ETFs

Pre-Market Outlook

DUST

EGPT

SOCL

ETFs to Watch September 24, 2013 (BSV, DUST, SOCL)

Big winners (up at least 5%): Direxion Daily Gold Miners Bear 3X Shares (NYSE: <a class="ticker" href="/stock/dust#NYSE">DUST</a>), VelocityShares 3x Inverse Natural Gas ETN (NYSE: <a class="ticker" href="/stock/dgaz#NYSE">DGAZ</a>) and the iPath Pure Beta Crude Oil ETN (NYSE: <a class="ticker" href="/stock/olem#NYSE">OLEM</a>).

	Big winners (down at least 5%): Direxion Daily Gold Miners Bull 3X Shares (NYSE: <a class="ticker" href="/stock/nugt#NYSE">NUGT</a>), iShares MSCI Emerging Markets Value ETF (NYSE: <a class="ticker" href="/stock/eval#NYSE">EVAL</a>) and the VelocityShares 3x Long Natural Gas ETN (NYSE: <a class="ticker" href="/stock/ugaz#NYSE">UGAZ</a>).

	Unusual volume (at least 5X ADV): iShares Utilities ETF (NYSE: <a class="ticker" href="/stock/idu#NYSE">IDU</a>), First Trust Utilities AlphaDEX Fund (NYSE: <a class="ticker" href="/stock/fxu#NYSE">FXU</a>), iShares MSCI Germany Small Cap ETF (NYSE: <a class="ticker" href="/stock/ewgs#NYSE">EWGS</a>), iShares MSCI USA ETF (NYSE: <a class="ticker" href="/stock/eusa#NYSE">EUSA</a>), SPDR S&amp;P Emerging Europe ETF (NYSE: <a class="ticker" href="/stock/gur#NYSE">GUR</a>), PowerShares Water Resources (NYSE: <a class="ticker" href="/stock/pho#NYSE">PHO</a>) and the Vanguard Industrials ETF (NYSE: <a class="ticker" href="/stock/vis#NYSE">VIS</a>).

	Must reads of the day:

	CNN Money: <a href="http://money.cnn.com/2013/09/23/investing/ipos-2013/index.html?section=money_markets&amp;utm_source=feedburner&amp;utm_medium=feed&amp;utm_campaign=Feed%3A+rss%2Fmoney_markets+%28Markets%29">The IPO market is stronger than you think</a>.

	Reformed Broker: <a href="http://www.thereformedbroker.com/2013/09/22/the-investment-case-for-africa/">Presents the case for investing in Africa</a>.

	All-Star Charts takes a look at what you can expect <a href="http://allstarcharts.com/from-false-moves-come-fast-moves/">false moves or failed breakouts/breakdowns</a>

	The Philippines <a href="http://www.benzinga.com/trading-ideas/long-ideas/13/09/3932583/taper-or-not-4-reasons-the-philippines-etf-will-shine-again">remains a shining star</a> that could shine brighter still.

	Bloomberg: Coffee <a href="http://www.bloomberg.com/news/2013-09-23/coffee-bears-double-bets-on-lower-robusta-price-on-vietnam-crop.html">bear market getting worse</a>.

	The Emmy Awards <a href="http://www.benzinga.com/trading-ideas/long-ideas/13/09/3934970/emmy-awards-do-nothing-for-relevant-etfs">were a non-event for some ETFs</a>.

	Don't forget to follow me on Twitter <a href="https://twitter.com/ETFProfessor1">@ETFProfessor1</a>.

After-Hours Center

DGAZ

EUSA

EVAL

EWGS

NUGT

OLEM

PowerShares Exchange Traded Fund Water Resource Portfolio

UGAZ

Benzinga's Mandatory ETF Reading for September 23, 2013

Here is the ETF Professor's ETF Watch List for Tuesday, September 17, 2013.

Keep an eye on the SPDR S&amp;P Regional Bank ETF (NYSE: <a class="ticker" href="/stock/kre#NYSE">KRE</a>).

Give the Consumer Staples Select Sector SPDR (NYSE: <a class="ticker" href="/stock/xlp#NYSE">XLP</a>) a look.

The iShares U.S. Utilities ETF (NYSE: <a class="ticker" href="/stock/idu#NYSE">IDU</a>) saw unusual volume Monday.

Check in with the iShares International Select Dividend ETF (NYSE: <a class="ticker" href="/stock/idv#NYSE">IDV</a>).

Emerging markets plays of the day: Market Vectors Egypt ETF (NYSE: <a class="ticker" href="/stock/egpt#NYSE">EGPT</a>), WisdomTree Emerging Markets Equity Income Fund (NYSE: <a class="ticker" href="/stock/dem#NYSE">DEM</a>) and the Market Vectors Brazil Small-Cap ETF (NYSE: <a class="ticker" href="/stock/brf#NYSE">BRF</a>).

Forex play of the day: CurrencyShares Australian Dollar Trust (NYSE: <a class="ticker" href="/stock/fxa#NYSE">FXA</a>).

Bond play of the iShares MBS ETF (NYSE: <a class="ticker" href="/stock/mbb#NYSE">MBB</a>).

iShares Dow Jones International Select Dividend Income Fund

ETFs to Watch September 17, 2013 (IDV, MBB, XLP)

Big winners (up at least 5%): VelocityShares 3x Long Natural Gas ETN (NYSE: <a class="ticker" href="/stock/ugaz#NYSE">UGAZ</a>).

	Big losers (down at least 5%): VelocityShares 3x Inverse Natural Gas ETN (NYSE: <a class="ticker" href="/stock/dgaz#NYSE">DGAZ</a>).

	Unusual volume (at least 5X ADV): Global X China Energy ETF (NYSE: <a class="ticker" href="/stock/chie#NYSE">CHIE</a>), iShares MSCI Poland Investable Market ETF (NYSE: <a class="ticker" href="/stock/epol#NYSE">EPOL</a>), First Trust AlphaDEX Utilities Fund (NYSE: <a class="ticker" href="/stock/fxu#NYSE">FXU</a>), iShares US Utilities ETF (NYSE: <a class="ticker" href="/stock/idu#NYSE">IDU</a>), Global X Social Media Index ETF (NASDAQ: <a class="ticker" href="/stock/socl#NASDAQ">SOCL</a>) and the PowerShares Dynamic Utilities ETF (NYSE: <a class="ticker" href="/stock/pui#NYSE">PUI</a>).

	Must reads of the day:

	Fabian Capital Management: Building an <a href="http://fabiancm.com/build-low-cost-etf-portfolio/">ETF portfolio for cheapskates</a>.

	ETF Trends: China ETFs <a href="http://www.etftrends.com/2013/09/china-etfs-could-extend-gains-on-demarks-comments/">could keep climbing</a> if this technical analyst is correct.

	ETF Trends: Some guy named <a href="http://www.etftrends.com/2013/09/for-a-minute-summers-could-help-em-etfs-ignore-tapering/">Summers and Fed tapering</a>.

	Barron's: Money is <a href="http://blogs.barrons.com/focusonfunds/2013/09/16/return-of-the-emerging-markets-investor-ishares-eem-sees-huge-cash-inflows/">is returning to emerging markets ETFs</a>.

	The Alibaba IPO <a href="http://www.benzinga.com/trading-ideas/long-ideas/13/09/3916110/not-just-twitter-another-ipo-could-jolt-these-etfs">is important to Internet ETFs,too</a>.

	Checking in <a href="http://www.benzinga.com/trading-ideas/long-ideas/13/09/3915871/dueling-views-on-hong-kong-etfs">with Hong Kong</a>.

	BlackRock/iShares: The <a href="http://www.blackrockblog.com/2013/09/13/paradox-fed-qe-tapering/">Paradox in Fed QE Tapering</a>.

CHIE

iShares MSCI Poland Investable Market Index Fund ETF

EPOL

PowerShares ETF Trust Dynamic Utilities Portfolio

Benzinga's Mandatory ETF Reading for September 16, 2013

Outline For The Election Playbook: Part 2

My Top Investment In September As Rate Cuts And The Election Come Into Focus

With market jitters on the rise ahead of the upcoming Fed meeting, many investors are seeking reliable and safer investment options. Therefore, there are three ETFs, Utilities Select Sector SPDR Fund (XLU), iShares U.S. Utilities ETF (IDU), and Fidelity MSCI Utilities Index (FUTY), that you could consider investing in, as they provide stable returns even during the times of economic turndowns. Learn more… Utility <a href="https://www.investopedia.com/terms/e/etf.asp">ETFs</a> are considered reliable investments as they consist of utility companies that provide essential services, such as electricity, water, and natural gas, which remain constant despite the economic conditions. Even in market turbulence, the utility sector is seen as a safe haven due to its stable nature and limited price fluctuations.
Given this positive sentiment, investing in utility ETFs like The Utilities Select Sector SPDR Fund (<a href="https://stocknews.com/stock/XLU/">XLU</a>), iShares U.S. Utilities ETF (<a href="https://stocknews.com/stock/IDU/">IDU</a>), and Fidelity MSCI Utilities Index ETF (<a href="https://stocknews.com/stock/FUTY/">FUTY</a>) might be wise choices for safe and steady returns in the market.
As the stock market enters September, historically one of its worst-performing months, many investors are shifting their focus to low-beta sectors like utilities, which are less prone to dramatic market swings.
Moreover, utilities have always been favored for their stable dividends, often referred to as "widow and orphan" stocks due to their low risk and consistent payouts. As interest rates are expected to drop later in the year, the attractiveness of utilities is expected to increase, offering investors solid yields of around 3%.
In addition, the Biden administration's focus on clean energy through programs like the Powering Affordable Clean Energy (PACE) initiative, which has earmarked <a href="https://www.usda.gov/media/press-releases/2024/08/29/biden-harris-administration-invests-140-million-lower-energy-costs">$140 million for clean energy projects</a>, utility stocks with significant investments in green energy are set to benefit even further.
Global trends also support the utility sector's growth prospects. With government spending on infrastructure and clean energy increasing, the utilities market is forecasted to reach $8.83 trillion by 2028, growing at a <a href="https://www.researchandmarkets.com/report/utilities?srsltid=AfmBOorU2s3WgUVIL2MiILUuNdxubkJXkS6nEf6Ut4_XTfJxdfhovTzU#:~:text=The%20utilities%20market%20size%20is%20expected%20to%20see%20strong%20growth%20in%20the%20next%20few%20years.%20It%20will%20grow%20to%20%248833.34%20billion%20in%202028%20at%20a%20compound%20annual%20growth%20rate%20(CAGR)%20of%206.4%25.">CAGR of 6.4%</a>.
With that in mind, let's evaluate the fundamentals of the featured <a href="https://stocknews.com/category/utility-etfs/">Utility ETFs</a>, starting with number three:
ETF #3: Fidelity MSCI Utilities Index ETF (<a href="https://stocknews.com/stock/FUTY/">FUTY</a>)
FUTY provides exposure to growth and value stocks of companies across diversified market capitalization by investing in utility sector stocks. It also aims to track the performance of the MSCI USA IMI Utilities 25/50 Index. This fund is managed by Fidelity Management &amp; Research Company LLC and also co-managed by BlackRock Fund Advisors.
With $1.36 billion in assets under management (AUM), its <a href="https://etfdb.com/etf/FUTY/#holdings">top holdings</a> are NextEra Energy, Inc. (<a href="https://stocknews.com/stock/NEE/">NEE</a>) with a 13.08% weighting in the fund, followed by Southern Company (<a href="https://stocknews.com/stock/SO/">SO</a>), Duke Energy Corporation (<a href="https://stocknews.com/stock/DUK/">DUK</a>), and Constellation Energy Corporation (<a href="https://stocknews.com/stock/CEG/">CEG</a>) at 7.66%, 7.10%, and 4.40% weight each, respectively. The ETF has a total of 68 holdings.
The ETF's expense ratio is 0.08%, lower than the category average of 0.44%. FUTY fund inflows were $52.78 million over the past month and $30.28 million over the past three months.
The fund pays an annual dividend of $1.41, which translates to a 2.89% yield at the current price level. Its four-year average yield is 2.99%. Its dividend payouts have grown at a 4.8% CAGR over the past five years.
FUTY has gained 22.7% over the past year to close the last trading session at $48.85. The fund's <a href="https://institutional.fidelity.com/prgw/digital/research/quote/dashboard/summary?symbol=FUTY">NAV was $48.85</a> as of September 06, 2024. Also, it has a beta of 0.77.
FUTY's solid fundamentals are reflected in its <a href="https://stocknews.com/powr-ratings/">POWR Ratings</a>. The fund has an overall rating of A, which translates to a Strong Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
FUTY has an A grade for Trade and Buy &amp; Hold. It is ranked #4 among 13 ETFs in the B-rated <a href="https://stocknews.com/category/utility-etfs/">Utility ETFs</a> group. <a href="https://stocknews.com/stock/FUTY/">Click here</a> to access FUTY's Peer rating.
ETF #2: iShares U.S. Utilities ETF (<a href="https://stocknews.com/stock/IDU/">IDU</a>)
IDU, managed by BlackRock Fund Advisors, focuses on investing in growth and value stocks of companies operating across the utilities sectors. The fund uses a representative sampling technique to track the performance of the Russell 1000 Utilities RIC 22.5/45 Capped Index. 
The fund has a total of 44 holdings. Its <a href="https://etfdb.com/etf/IDU/#holdings">top holdings</a> include NextEra Energy, Inc. (NEE) with a 12.21% weighting, Southern Company (SO) at 7.25%, followed by Duke Energy Corporation (DUK) and Waste Management, Inc. (<a href="https://stocknews.com/stock/WM/">WM</a>) with 6.67% and 6.18% weightings, respectively.
IDU's trailing-12-month dividend of $2.17 per share yields 2.25% on the current price level, while its four-year average dividend yield is 2.61%.
The fund has an expense ratio of 0.39% compared to the category average of 0.44%. Over the past six months, IDU's fund inflows came in at $396.35 million. Also, the ETF has a five-year beta of 0.76.
IDU has gained 21.1% over the past nine months and 25.4% over the past year to close the last trading session at $96.51. As of September 06, 2024, IDU had an AUM of $1.40 billion and an <a href="https://www.ishares.com/us/products/239524/ishares-us-utilities-etf">NAV of $96.44</a>.
IDU's POWR Ratings reflect solid prospects. It has an overall rating of A, equating to a Strong Buy in our proprietary rating system.
IDU has an A grade for Trade and Buy &amp; Hold and a B for Peer. Of the 13 ETFs in the same B-rated group, it is ranked #3. To access all of IDU's POWR Ratings, <a href="https://stocknews.com/stock/IDU/">click here</a>.
ETF #1: The Utilities Select Sector SPDR Fund (<a href="https://stocknews.com/stock/XLU/">XLU</a>)
XLU is managed by State Street Global Advisors (SSGA) Funds Management, Inc. and invests in stocks of companies operating across the utilities sector in the markets of the United States. The fund seeks to track the performance of the Utilities Select Sector Index.
The fund has $17.68 billion in AUM. Its <a href="https://etfdb.com/etf/XLU/#holdings">top holdings</a> are NEE with a 14.30% weighting, SO at 8.37%, followed by DUK and CEG at 7.76% and 4.80%, respectively. The fund has a total of 32 holdings.
XLU has an expense ratio of 0.09%, lower than the category average of 0.44%. Its fund inflows were $696.85 million over the past month and $3.01 billion over the past six months. Also, it has a 5-year beta of 0.75.
The fund pays an annual dividend of $2.19, translating to a 2.89% yield at the prevailing price level. Its dividend payouts have grown at a 3.6% CAGR over the past three years. The fund's four-year average yield is 3.09%.
Over the past year, XLU has gained 22.8% to close the last trading session at $75.91. The ETF had an <a href="https://www.ssga.com/us/en/intermediary/etfs/the-utilities-select-sector-spdr-fund-xlu">NAV of $76.63</a> as of September 05, 2024.
XLU's POWR Ratings reflect this promising outlook. The ETF's overall A rating equates to a Strong Buy in our proprietary rating system.
XLU has an A grade for Trade and Buy &amp; Hold and a B for Peer. In the Utility ETFs group, it is ranked first. Get all XLU ratings <a href="https://stocknews.com/stock/XLU/">here</a>.
What To Do Next?
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<hr />
XLU shares closed at $75.91 on Friday, down $-0.73 (-0.95%). Year-to-date, XLU has gained 21.83%, versus a 14.41% rise in the benchmark S&amp;P 500 index during the same period.
<hr><div style="clear:both;"></div> <h2>About the Author: Shweta Kumari</h2> <img src='https:/wp-content/uploads/2022/03/Shweta-Kumari_Image-2.jpg' style="float:left; padding:5px;width:125px;">Shweta's profound interest in financial research and quantitative analysis led her to pursue a career as an investment analyst. She uses her knowledge to help retail investors make educated investment decisions.<a href="https://stocknews.com/authors/?author=shweta-kumari">More...</a>The post <a href=https://stocknews.com/news/xlu-idu-futy-3-utility-etfs-to-buy-for-safe-steady-returns/>3 Utility ETFs to Buy for Safe, Steady Returns</a> appeared first on <a href=https://stocknews.com/>StockNews.com</a>

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iShares U.S. Utilities ETF

Overview

iShares U.S. Utilities ETF (ARCA:IDU), Quote.Headers.trade-ideas