SPDR Utilities Select Sector SPDR Fund,

• XLU is the SPDR Utilities Select Sector SPDR Fund, an exchange-traded fund (ETF) that gives exposure to the U.S. utilities sector — companies that produce, transmit or distribute electricity, gas, water, and related services. State Street Global Advisors+2ETF Database+2

• It tracks the Utilities Select Sector Index, which comprises many of the largest utility companies in the S&P 500. State Street Global Advisors+2sumgrowth.com+2

• The fund is passively managed — it simply mirrors the index rather than picking stocks actively. That’s reflected in its low cost: an expense ratio of about 0.08% a year. State Street Global Advisors+2sectorspdrs.com+2

• XLU holds ~31 companies. sectorspdrs.com+1

• Typical sectors include electric, gas, water utilities, independent power producers, and renewable-power companies. State Street Global Advisors+2sumgrowth.com+2

Because of this setup — passive, diversified (within utilities), regulated industries — XLU is often seen as a defensive, income-oriented ETF rather than a high-growth, high-volatility play. ETF Database+2Seeking Alpha+2

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 Recent Performance & What’s Driving It (2024–2025)

• As of late 2025, XLU is trading in the ballpark of USD 88–90 (depending on the trading day). Investing.com India+2Investing.com+2

• In the past 12 months, the ETF has returned around +8–12% (depending on the measure: price return vs total return, etc.) Investing.com+2Seeking Alpha+2

• More broadly, the fund has delivered mid-single-digit to low double-digit returns annually over longer horizons. For example, some long-term return series show roughly ~9–10% annualized returns since inception (though that includes reinvested dividends etc.) sectorspdrs.com+2Seeking Alpha+2

Why has XLU done relatively well recently (even when “risk-on” sectors often lead)? Several factors:

• There's growing interest in the utilities sector thanks to rising demand for electricity — in part driven by data-centers, AI infrastructure, and electrification trends. The Motley Fool+2etf.com+2

• As a sector, utilities are viewed as defensive and recession-resistant: people and businesses tend to pay for water, power, gas, etc., even when economic growth slows. This makes XLU a potential haven when broader markets are volatile. ETF Database+2Seeking Alpha+2

• It also pays higher yield / dividends than many equity funds, making it attractive for income-oriented investors. Nasdaq+2ETF Database+2

Some recent analysts have called out XLU as a potential “quiet winner” of the AI-driven electricity demand boom. The Motley Fool+1

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Tradeoffs and Risks

• Because XLU focuses only on utilities (and only the large-cap ones within the S&P 500), it is less diversified than broad-market index funds. This means it's exposed to sector-specific risk (e.g. regulation, interest rates, commodity costs) rather than being spread across many industries. TradingView+2sumgrowth.com+2

• Historically, utilities tend to grow more slowly than high-growth sectors (like tech, consumer discretionary), so long-term capital appreciation may lag those sectors. Seeking Alpha+1

• Some analysts feel XLU may be “overvalued” if its rally pushes valuations ahead of fundamentals — especially if interest rates rise again or electricity demand slows. Seeking Alpha+2Seeking Alpha+2

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Who XLU Might Suit — and When to Use It

XLU can make sense if you are:

• Looking for a defensive, stable income-generating investment, especially via dividends.

• Expecting economic volatility or want to reduce exposure to high-beta / growth-heavy equities.

• Wanting sector-level exposure to utilities — for example, as part of a broader diversified portfolio that already has growth/tech and bond allocations.

• Betting on structural trends in energy demand (like electrification, data-centers, renewables) — or want to capture potential upside from those macro themes.

On the flip side, if your goal is maximum growth / aggressive returns, you might combine XLU with higher-growth assets/utilities from other regions or sectors.