Exchange Traded Funds (ETFs)

ETF Talk: It’s Time to Energize Your Portfolio

I love energy. It’s at the heart of human greatness and ingenuity. Without energy, many of our modern-day conveniences, inventions and societal wonders would be nonexistent.

This holds true for humanity’s latest and greatest innovation: artificial intelligence (AI). While AI is capable of extraordinary feats, in its current state, it requires excessive amounts of energy to keep running optimally. And, as a direct result of this hardy demand, utilities stocks have been on the rise to meet AI’s energy needs.

That creates a prime investment opportunity for us, with there being several promising means of catching a ride on this speeding market train. And in my view, one of the best tickets to ride is the Invesco S&P 500 Equal Weight Utilities ETF (RSPU).

First launched in 2006 by Invesco under the ticker RYU, RSPU tracks an equal-weighted index of large-cap utilities companies, which skews it away from being a market-like portfolio. This index is rebalanced on a quarterly basis.

The fund also allocates significantly to telecom stocks, setting it apart from other utilities funds. This gives RSPU an added edge over some of its contemporaries, as telecom stocks may pay higher dividends than utilities.

Top holdings in this fund include Vistra Corp. (NYSE: VST), Constellation Energy Corporation (NASDAQ: CEG), NRG Energy, Inc. (NYSE: NRG), CenterPoint Energy, Inc. (NYSE: CNP), Public Service Enterprise Group Inc (NYSE: PEG), Ameren Corporation (NYSE: AEE), Entergy Corporation (NYSE: ETR) and Atmos Energy Corporation (NYSE: ATO).

As of Oct. 15, RSPU has been up 1.26% over the past month and up 11.94% for the past three months. It is currently up 25.38% year to date. The fund currently has $338.33 million in assets under management and an expense ratio of 0.40%.

Exclusive ETF Talk: Finding Value in Your Brokerage

Chart courtesy of www.stockcharts.com.

While RSPU offers a promising entry point into both utilities and telecom stocks, this may not benefit all portfolios. It’s important to carefully consider the risks and potential returns before making any investment decisions.

As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an email. You just may see your question answered in a future ETF Talk.

Jim Woods

Jim Woods is a 20-plus-year veteran of the markets with varied experience as a broker, hedge fund trader, financial writer, author and newsletter editor. Jim is the editor of Forecasts & Strategies, Tactical Trader, TNT Trader, Five Star Trader, Bullseye Stock Trader, and The Deep Woods. His books include co-authoring, “Billion Dollar Green: Profit from the Eco Revolution,” and “The Wealth Shield: How to Invest and Protect Your Money from Another Stock Market Crash, Financial Crisis or Global Economic Collapse.” He’s also ghostwritten many books and articles, as well as edited content for some of the investment industry’s biggest luminaries. His articles have appeared on many leading financial websites, including StockInvestor.com, InvestorPlace.com, Main Street Investor, MarketWatch, Street Authority, Human Events and many others. Jim formerly worked with Investor’s Business Daily founder William J. O’Neil, helping to author training courses in the CANSLIM stock-picking methodology. The independent firm TipRanks rates Jim the No. 3 financial blogger in the world (out of more than 6,000). TipRanks calculates that, since 2012, he's made 361 successful recommendations out of 499 total, earning a success rate of 72% and a +15.3% average return per recommendation. He is known in professional and personal circles as “The Renaissance Man,” because his expertise includes such varied fields as composing and performing music; Western horsemanship, combat marksmanship, martial arts, auto racing and bodybuilding. Jim holds a BA in philosophy from the University of California, Los Angeles, and is a former U.S. Army paratrooper. A self-described “radical for capitalism,” he celebrates the virtue of making money from his Southern California horse ranch.