With so many ETFs out there, investors cannot simply look at ETF labels. They need in-depth research of the ETFs holdings and costs. New Constructs offers this kind of research.
The Utilities sector ranks ninth out of the ten sectors as detailed in my Sector Rankings for ETFs and Mutual Funds report. It gets my Dangerous rating, which is based on aggregation of ratings of 8 ETFs and 35 mutual funds in the Utilities sector as of January 30, 2013.
This report focuses on my top picks and pans for all sector funds. I will follow this summary with a detailed report on each sector.
Why are there so many ETFs? The answer is: because ETF providers are making lots of money selling them. The number of ETFs has little to do with serving investors’ best interests. Here are three red flags investors can use to avoid the worst ETFs…
Finding the best ETFs is an increasingly difficult task in a world where a new ETF seems to be born every 10 seconds.
The Utilities sector ranks eighth out of the ten sectors as detailed in my sector roadmap. It gets my Dangerous rating, which is based on aggregation of ratings of 9 ETFs and 33 mutual funds in the Utilities sector as of July 13, 2012.
High dividend yields are NOT enough to warrant investing in the utilities sector.
Too many investors put their hard-earned money in utility stocks with the assumption that relatively high-yielding dividends from stable business make a good investment.
The real question that investors in any equity security must ask is: does my expected return from a stock justify the risk of investing in it?
We recommend investors avoid all utility sector ETFs. There are no ETFs in the utility sector with an attractive-or-better rating. None of the ETFs rank better than the S&P500.
Investors should sell the following dangerous-rated utility sector ETFs: