If You'd Invested $1,000 in the Utilities Select Sector SPDR Fund (XLU) 10 Years Ago, Here's How Much You'd Have Today
Key Points
The State Street Utilities Select Sector SPDR ETF delivered a solid, but not amazing, return.
It encompasses around 31 utility companies and offers a dividend.
Some are growing bullish on the sector due to increased energy demand for artificial intelligence.
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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 (NYSEMKT: XLU). It's an exchange-traded fund (ETF) -- a fund that trades like a stock -- and it's focused on utilities businesses.
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%.
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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%.
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Selena Maranjian has positions in NextEra Energy. The Motley Fool has positions in and recommends Constellation Energy and NextEra Energy. The Motley Fool recommends Dominion Energy and Duke Energy. The Motley Fool has a disclosure policy.
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