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The Virtus Reaves Utilities ETF (NYSEARCA:UTES) is one of the only actively managed funds in the utilities category, and its 0.49% expense ratio sits near the top end of what utility investors will pay.
Utility stocks returned to focus in 2026 as artificial intelligence data center demand strained the power grid.
Q2 earnings are off to a strong start. Tech, Energy, Materials, Finance and Aerospace ETFs could shine as profit growth broadens across sectors.
BULIX, FSUTX and FKUTX gain traction as utilities ride defensive demand and AI-driven electricity growth, reshaping their role in 2026 portfolios.
The State Street Utilities Select Sector SPDR ETF (XLU) has long been viewed as a defensive investment, preferred by investors seeking stable cash flows, consistent dividends, and lower volatility.
Electricity is becoming a stronger economic growth engine, powering AI data centres, EVs, heat pumps and industrial decarbonisation. But grids aren't keeping up.
The AI data-center power crunch has turned utilities from bond proxies into growth stocks, and two funds sit at the center of that trade: the Utilities Select Sector SPDR Fund (NYSEARCA:XLU) and the Vanguard Utilities Index Fund ETF (NYSEARCA:VPU).
COLL, IRWD, AMTB and DUK stand out as defensive stock picks as investors rotate from AI-driven tech amid the ongoing sell-off and seek safer sectors.