First Trust Utilities AlphaDEX Fund (ARCA: FXU)

最新ニュース First Trust Utilities AlphaDEX Fund (ARCA:FXU)

First Trust Utilities AlphaDEX Fund

Utilities

Industrials

Energy

The Fund will normally invest at least 90 percent of its net assets (including investment borrowings) in the securities that comprise the Index. The Fund, using an indexing investment approach, attempts to replicate, before fees and expenses, the performance of the Index. The Index is part of the StrataQuant Series, a family of custom enhanced indices developed, maintained and owned by ICE Data Indices, LLC or its affiliates (IDI or the Index Provider). The Index Provider reserves the right to, at any time, change the number of stocks comprising the Index by adding or deleting one or more stocks, or replacing one or more stocks contained in the Index with one or more substitute stocks of its choice, if in the Index Providers discretion, such addition, deletion or substitution is necessary or appropriate to maintain the quality and/or character of the Index.

Evergy Inc Sedol Bfmxgr0

Exelon Corp.

Entergy Corp

National Fuel Gas Co

Avangrid Inc

Brookfield Renewable Corp.

Ameren Corp.

Consolidated Edison Inc.

Pinnacle West Capital Corp.

Nrg Energy Inc.

Vistra Energy Corp.

Ugi Corp Hlds

Mdu Resources

American Electric Power Co. Inc.

Duke Energy Corp.

Oge Energy Corp.

Dte Energy Co.

Clearway Energy Inc. (class C)

CenterPoint Energy, Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/CNP#NYSE">CNP</a>) reported third-quarter sales of&nbsp;$1.856 billion<a target="_blank" href="https://www.benzinga.com/pressreleases/24/10/b41569191/centerpoint-energy-reports-q3-2024-results-reiterates-2024-full-year-guidance-and-initiates-2025-f" rel="noreferrer noopener">, which missed the street view of $1.933 billion</a>.
Adjusted EPS was $0.31, <a href="https://www.benzinga.com/earnings" target="_blank" rel="noreferrer noopener">missing the consensus of $0.32</a>. Adjusted EPS was $0.09 lower from the same period in 2023, owing to a $0.11 per share increase in operating and maintenance expenses linked to the first phase of the Greater Houston Resiliency Initiative.
Growth and regulatory recovery added $0.09 per share, but gains were offset by unfavorable usage ($0.02 per share) due to Hurricane Beryl outages and adverse weather variances ($0.04 per share) at Houston Electric, compared to third-quarter 2023.
Outlook: The company reaffirmed its 2024 adjusted EPS guidance of $1.61 &#8211; $1.63 (vs. street view of $1.62), reflecting 8% growth over 2023 at the midpoint.
CenterPoint also introduced 2025 adjusted EPS guidance of $1.74 &#8211; $1.76 (vs. consensus of $1.73), representing an <a target="_blank" href="https://www.benzinga.com/calendars/guidance" rel="noreferrer noopener">8% increase from the 2024 midpoint</a>.
The company reiterated the company&#8217;s annual EPS growth target of 6% &#8211; 8% through 2030.
Jason Wells, President &amp; CEO of CenterPoin said, &#8220;Our enhanced resiliency investment journey is well underway, and we&#8217;ve made tremendous progress over the last couple years in hardening our transmission system.&#8221;
&#8220;We&#8217;ve now turned our attention to increasing and accelerating investments in automation and self-healing technologies at the distribution system level which we believe will help us deliver on our goal for Houston Electric to build the most resilient coastal grid in the nation.&#8221;
Investors can gain exposure to the stock via Virtus Reaves Utilities ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UTES#NYSE">UTES</a>) and First Trust Utilities AlphaDEX Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/FXU#NYSE">FXU</a>).
Price Action: CNP shares closed lower by 0.58% at $29.31 on Friday.
Read Next:
<ul>
<li><a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/09/40841924/nisource-set-for-outperformance-but-centerpoint-energy-faces-regulatory-hurdles-say" target="_blank" rel="noreferrer noopener">NiSource Set For Outperformance But CenterPoint Energy Faces Regulatory Hurdles, Says BofA Analyst</a></li>
</ul>

Earnings

Equities

News

Guidance

UTES

CenterPoint Energy Q3: Misses On Earnings, But Keeps 2024-2025 Growth Target Strong

As the Federal Reserve transitions from a restrictive monetary policy to a more accommodative stance, investors are questioning how this regime change will <a href="https://www.benzinga.com/topic/interest-rates">impact various asset classes. </a>
The central bank&#8217;s shift towards lower interest rates can have far-reaching implications across equities, bonds, and other markets.
Historically, stocks have tended to perform well following the Fed&#8217;s initial rate cuts—but with a crucial caveat: the economy must avoid slipping into a recession. An <a href="https://www.benzinga.com/economics/macro-economic-events/24/09/40855247/fed-rate-cuts-and-s-p-500-the-why-matters-most-data-shows">analysis by Goldman Sachs</a> reveals that the S&amp;P 500 has experienced significant declines even after rate cuts if the U.S. economy entered a recession during those periods.
When it comes to bonds, lower interest rates have generally led to a decrease in bond yields, thus driving up bond prices. Unlike equities, this dynamic has historically played out somewhat independently of the economic cycle. However, &#8220;what's past is prologue&#8221; is not always a guarantee in financial markets.
<h2 class="wp-block-heading">&#8216;Quality Can Be Found Across Asset Classes&#8217;</h2>
According to Bank of America&#8217;s latest Research Investment Committee (RIC) report, investors can identify quality opportunities across various asset classes, particularly in today&#8217;s shifting market landscape.
BofA analysts suggest that in the U.S. equity space, investors should adopt a defensive stance, focusing on companies with high free cash flow.
Savita Subramanian, head of U.S. equity &amp; quantitative strategy at BofA, notes that S&amp;P 500 valuations indicate low price returns for the next decade, making dividend payouts more crucial for total returns.
<ul>
<li>Utilities: Recently <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/09/40823561/this-under-the-radar-defensive-ai-sector-quietly-outperforms-all-others-despite-rec">upgraded to Overweight by BofA, </a>the utilities sector stands out for its defensive characteristics and competitive yield. Subramanian indicates that growing power demand driven by AI-linked data centers bolsters the outlook for utility companies. ETFs like the First Trust Utilities AlphaDEX ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/FXU#NYSE">FXU</a>) and the Utilities Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLU#NYSE">XLU</a>) are potential plays in this space.</li>
<li>Real Estate: Offering higher quality yield than before, with 70% of the sector rated B+ or better, the real estate sector provides attractive options. BofA notes that the S&amp;P 500 real estate segment has relatively low office exposure, which could mitigate some risks. Recommended ETFs include the Real Estate Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLRE#NYSE">XLRE</a>) and iShares Cohen &amp; Steers REIT ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/ICF#NYSE">ICF</a>).</li>
<li>Consumer Staples: BofA finds the consumer staples sector tactically attractive, especially ETFs like the Consumer Staples Select Sector SPDR ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLP#NYSE">XLP</a>), which has substantial exposure to resilient companies like The Procter &amp; Gamble Co. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PG#NYSE">PG</a>), Costco Wholesale Corp. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/COST#NASDAQ">COST</a>), Walmart Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/WMT#NYSE">WMT</a>). Another sector play here is the iShares U.S. Consumer Staples ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IYK#NYSE">IYK</a>). </li>
<li>Value, Quality, Dividends, and Buybacks: The bank is also bullish on factor-based ETFs, recommending exposure in value, quality, dividend, and buyback amid a strong free cash flow yield and potential for higher payouts than the broader S&amp;P 500 index. ETFs in this category include the Vanguard Value ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VTV#NYSE">VTV</a>), Pacer US Cash Cows 100 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/COWZ#NYSE">COWZ</a>), Schwab US Dividend Equity ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SCHD#NYSE">SCHD</a>), and iShares Core Dividend ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DIVB#NYSE">DIVB</a>).</li>
</ul>
Outside the U.S., Bank of America is bullish on Japanese equities as effective corporate reforms are expected &#8220;to unleash a mountain of cash.&#8221; The WisdomTree Japan Hedged Equity ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DXJ#NYSE">DXJ</a>) is a top pick in this market, having gained 125% since 2019. This ETF also offers protection against the yen&#8217;s devaluation. 
In the fixed-income market, BofA suggests exposure to AAA-rated collateralized loan obligations (CLOs) and long-dated Treasury bonds.
<ul>
<li>CLOs: BofA recommends the Janus Henderson AAA CLO ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/JAAA#NYSE">JAAA</a>), viewing these loans as quality yield options that have withstood stress during both the 2008 financial crisis and the 2020 pandemic-induced downturn.</li>
<li>Long-Dated Treasuries: Investors looking for duration exposure can consider the iShares 20+ Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NASDAQ">TLT</a>), which tracks long-dated Treasury bonds with a 17-year duration.</li>
</ul>
<figure class="wp-block-table is-style-stripes"> 
<table>
<thead>
<tr>
<th>Asset Class</th>
<th>Name</th>
</tr>
</thead>
<tbody>
<tr>
<td colspan="3">Equities</td>
</tr>
<tr>
<td>Utilities</td>
<td>First Trust Utilities AlphaDEX ETF</td>
</tr>
<tr>
<td>Utilities </td>
<td>Utilities Select Sector SPDR Fund</td>
</tr>
<tr>
<td>Real Estate</td>
<td>Real Estate Select Sector SPDR Fund </td>
</tr>
<tr>
<td>Real estate</td>
<td>iShares Cohen &amp; Steers REIT ETF</td>
</tr>
<tr>
<td>Consumer staples</td>
<td>Consumer Staples Select Sector SPDR ETF </td>
</tr>
<tr>
<td>Consumer staples</td>
<td>iShares U.S. Consumer Staples ETF</td>
</tr>
<tr>
<td>Value</td>
<td>Vanguard Value ETF</td>
</tr>
<tr>
<td>Quality</td>
<td>Pacer US Cash Cows 100 ETF </td>
</tr>
<tr>
<td>Dividend</td>
<td>Schwab US Dividend Equity ETF</td>
</tr>
<tr>
<td>Buybacks</td>
<td>iShares Core Dividend ETF </td>
</tr>
<tr>
<td>Japan</td>
<td>Wisdom Tree Japan Hedged Equity ETF</td>
</tr>
<tr>
<td colspan="3">Fixed income</td>
</tr>
<tr>
<td>Credit</td>
<td>Janus Henderson AAA CLO ETF</td>
</tr>
<tr>
<td>Duration</td>
<td>iShares 20+ Year Treasury Bond ETF </td>
</tr>
</tbody>
</table>
</figure>
Read Next:
<ul>
<li><a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/09/40887448/long-dated-treasury-bond-etf-hits-14-month-highs-ahead-of-imminent-fed-rate-cut">Long-Dated Treasury Bond ETF Hits 14-Month Highs Ahead Of Imminent Fed Rate Cut</a></li>
</ul>
Image created using artificial intelligence via Midjourney.

Analyst Color

REIT

Sector ETFs

Bonds

Broad U.S. Equity ETFs

Specialty ETFs

New ETFs

Treasuries

Econ #s

ETFs

Real Estate

COST

COWZ

DIVB

WisdomTree Trust Japan Total Dividend Fund

iShares Trusthen & Steers Realty Majors Index Fund

iShares Trust Dow Jones USnsumer Goods Sector Index Fund

JAAA

SCHD

iShares Trust Barclays 20+ Year Treasury Bond Fund

XLRE

13 ETFs To Own As Fed Set To Cut Rates: Analysts Highlight Utilities, Real Estate, And More

Launched on 05/08/2007, the First Trust Utilities AlphaDEX ETF (ARCA:FXU) is a passively managed exchange traded fund designed to provide a broad exposure to the Utilities - Broad segment of the equity market.
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
Additionally, sector ETFs offer convenient ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Utilities - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 3, placing it in top 19%.
Index Details
The fund is sponsored by First Trust Advisors. It has amassed assets over $256.06 million, making it one of the average sized ETFs attempting to match the performance of the Utilities - Broad segment of the equity market. FXU seeks to match the performance of the StrataQuant Utilities Index before fees and expenses.
The StrataQuant Utilities Index is a modified equal-dollar weighted index designed by the AMEX to objectively identify and select stocks from the Russell 1000 Index that may generate positive alpha relative to traditional passive style indices through the use of the AlphaDEX screening methodology.
Costs
Investors should also pay attention to an ETF&#39;s expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for this ETF are 0.64%, making it one of the most expensive products in the space.
It has a 12-month trailing dividend yield of 2.65%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Utilities sector--about 96.50% of the portfolio.
Looking at individual holdings, Vistra Corp. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/vst#NYSE">VST</a>) accounts for about 4.91% of total assets, followed by National Fuel Gas Company (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/nfg#NYSE">NFG</a>) and Oge Energy Corp. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/oge#NYSE">OGE</a>).
The top 10 holdings account for about 40.31% of total assets under management.
Performance and Risk
The ETF return is roughly 9.28% so far this year and is up about 7.99% in the last one year (as of 07/15/2024). In that past 52-week period, it has traded between $27.35 and $35.11.
The ETF has a beta of 0.67 and standard deviation of 17.52% for the trailing three-year period, making it a medium risk choice in the space. With about 41 holdings, it has more concentrated exposure than peers.
Alternatives
First Trust Utilities AlphaDEX ETF sports a Zacks ETF Rank of 4 (Sell), which is based on expected asset class return, expense ratio, and momentum, among other factors. FXU, then, is not the best option for investors seeking exposure to the Utilities/Infrastructure ETFs segment of the market. However, there are better ETFs in the space to consider.
Vanguard Utilities ETF (ARCA:VPU) tracks MSCI US Investable Market Utilities 25/50 Index and the Utilities Select Sector SPDR ETF (ARCA:XLU) tracks Utilities Select Sector Index. Vanguard Utilities ETF has $5.74 billion in assets, Utilities Select Sector SPDR ETF has $14.63 billion. VPU has an expense ratio of 0.10% and XLU charges 0.09%.
<a href="https://www.zacks.com/stock/news/2301337/should-you-invest-in-the-first-trust-utilities-alphadex-etf-fxu?cid=CS-BENZ-FT-sector_etf-2301337">To read this article on Zacks.com click here.</a>

Large Cap

Markets

Analyst Ratings

Trading Ideas

Should You Invest in the First Trust Utilities AlphaDEX ETF?

Momentum, an investment factor rooted in the idea that a security that has already appreciated in price can continue doing so, makes a predictable candidate to overshoot declines when the broad market declines.
When it comes to momentum-based exchange traded funds, however, various funds apply momentum in different ways, creating significant performance-level differences.
<h3>What Happened</h3>
The iShares Edge MSCI USA Momentum Factor ETF (CBOE:MTUM) recently boosted its allocation to technology stocks to almost 40 percent of its weight, more than triple its weight to health care, its second-largest sector weight. Even with that increased tech exposure, MTUM is down about 1.60 percent in May, far better than the 5 percent shed by the S&amp;P 500.
&ldquo;Using momentum ETFs, investors can gain some diversification using this approach, but it is important to understand the exposure is not static and that momentum funds can be quite different,&rdquo; said <a href="https://www.cfraresearch.com/">CFRA Research</a> Director of ETF &amp; Mutual Fund Research Todd Rosenbluth in a note out Thursday.
Rosenbluth has an Overweight rating on the $8.55 billion MTUM, which tracks the MSCI USA Momentum Index.
<h3>Why It&#39;s Important</h3>
The First Trust Dorsey Wright Focus 5 ETF (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/fv#NASDAQ">FV</a>) is another momentum-based ETF. FV adheres to Dorsey, Wright &amp; Associates (DWA) relative strength methodology and has a selection universe consisting of First Trust industry and sector funds.
Recently, FV removed the First Trust Health Care AlphaDEX Fund (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/fxh#NYSE">FXH</a>), a health care ETF heavy on the sector&#39;s growth industries, in favor of the more conservative First Trust AlphaDEX Utilities Fund (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/fxu#NYSE">FXU</a>).
&ldquo;But while MTUM invests in stocks with strong price momentum, the $2.4 billion FV holds equal stakes in five sector or industry ETFs offered by First Trust with the best relative strength,&rdquo; said Rosenbluth. &ldquo;The analysis used for FV is conducted twice monthly, but ETFs are replaced when they fall sufficiently out of favor, which helps to limit turnover.&rdquo;
<h3>What&#39;s Next</h3>
Although FXU is FV&#39;s largest holdings, the four other ETFs residing in FV are biotechnology, Internet and technology funds, indicating the fund is hardly defensive and explaining why FV is lower by nearly 7 percent this month.
CFRA has an Overweight rating on MTUM and does not rate FV.
Related Links:
<a href="https://www.benzinga.com/trading-ideas/long-ideas/19/05/13826942/an-etf-idea-for-an-emerging-markets-rebound">An EM ETF Rebound Candidate</a>
<a href="https://www.benzinga.com/trading-ideas/long-ideas/19/05/13826960/waiting-for-electric-vehicles-etfs-to-get-in-gear">This ETF Can Drive Higher</a>

Long Ideas

MTUM

Momentum ETFs Dinged By Market Pullback

Since coming to market just over three years ago, the First Trust Dorsey Wright Focus 5 ETF (NASDAQ: <a class="ticker" href="/stock/fv#NASDAQ">FV</a>) has proven popular with advisors and investors that follow Dorsey Wright&#39;s relative strength-based strategies.
That sentiment is confirmed by FV&#39;s more than $2.4 billion in assets under management. FV follows the Dorsey Wright Focus Five Index, which &ldquo;is designed to provide targeted exposure to five First Trust sector and industry based ETFs that Dorsey, Wright &amp; Associates (DWA) believes offer the greatest potential to outperform the other ETFs in the selection universe and that satisfy trading volume and liquidity requirements,&rdquo; according to <a href="http://www.ftportfolios.com/Retail/Etf/EtfSummary.aspx?Ticker=FV">First Trust</a>.
FV has a counterpart that is proving popular as well. The First Trust Dorsey Wright Dynamic Focus 5 ETF (NASDAQ: <a class="ticker" href="/stock/fvc#NASDAQ">FVC</a>) adds a cash component to the ETF of ETFs strategy found in FV.
<h3>More About FVC</h3>
Like FV, the First Trust Dorsey Wright Dynamic Focus 5 ETF holds five First Trust sector and industry that are displaying positive relative strength ETFs. FVC&#39;s linuep is as follows: The First Trust Dow Jones Internet Index Fund (NYSE: <a class="ticker" href="/stock/fdn#NYSE">FDN</a>), First Trust NASDAQ-100-Technology Sector Index Fund (NASDAQ: <a class="ticker" href="/stock/qtec#NASDAQ">QTEC</a>), First Trust Industrials/Producer Durables AlphaDEX Fund (NYSE: <a class="ticker" href="/stock/fxr#NYSE">FXR</a>), First Trust Nasdaq Bank ETF (NASDAQ: <a class="ticker" href="/stock/ftxo#NASDAQ">FTXO</a>) and the First Trust Utilities AlphaDEX Fund (NYSE: <a class="ticker" href="/stock/fxu#NYSE">FXU</a>).
&ldquo;While we are pitted firmly in corporate earnings season now as we have repeatedly documented in this daily piece, a fund such as FVC may be potentially very useful in monitoring how various sectors are reacting to earnings hits and misses around the markets and how these industries are trading relative to one another since they are constantly in motion,&rdquo; said <a href="http://streetonefinancial.com/">Street One Financial</a> Vice President Paul Weisbruch in a recent note.
FVC&#39;s index &ldquo;is designed to provide targeted exposure to five First Trust sector and industry based ETFs and the Nasdaq US T-Bill Index,&rdquo; <a href="http://www.ftportfolios.com/Retail/Etf/EtfSummary.aspx?Ticker=FVC">according to First Trust</a>.
<h3>Slight Differences ... So Far</h3>
Year to date, FV is up 9.4 percent while FVC is higher by 9.1 percent, indicating that the latter&#39;s cash component is not restraining its ability to compete with the former&#39;s returns this year.
FVC debuted in March 2016 and has established a solid following as highlighted by $331.1 million in assets under management. Regarding FV and FVC, investors should stay up-to-date regarding possible changes in the ETFs&#39; rosters.
&ldquo;Of course, being a rules-based strategy it is helpful to look at these holdings a couple times per month to see if there have been any relative strength changes in the marketplace that warrant a reshuffling of the portfolio and perhaps this will lend clues to which names/sectors will be shorter and longer term leaders and laggards,&rdquo; added Weisbruch.
Related Links:
<a href="https://www.benzinga.com/analyst-ratings/analyst-color/17/08/9851427/revisiting-some-high-dividend-etfs">Revisiting High Dividend ETFs</a>
<a href="https://www.benzinga.com/general/biotech/17/07/9845505/spicing-up-the-health-care-trade">Some Spice With A Healthcare ETF</a>

First Trust Dow Jones Internet Index Fund

FTXO

First Trust Industrials/Producer Durables AlphaDEX Fund

First Trust NASDAQ-100 Technology Index Fund

QTEC

A Different Spin On A Popular ETF

With the <a href="https://www.benzinga.com/trading-ideas/long-ideas/16/10/8590026/this-catalyst-could-reinvigorate-low-volatility-etfs">low volatility, quality and value</a> investment factors outperforming this year, it might be logical to assume momentum is struggling.
<h3>FV: Gauging The Momentum Factor</h3>
If the once beloved First Trust Exchange Traded Fund VI (NASDAQ: <a class="ticker" href="/stock/fv#NASDAQ">FV</a>) is an accurate gauge, yes, momentum is struggling. Still, FV&#39;s 3.3 percent year-to-date loss is not staggering and it cannot be ignored that the ETF is up more than 15 percent off its February lows.
Although FV is considered a passively managed ETF, relative strength analysis of its constituent ETFs is conducted weekly, meaning if one (or more) of the holdings tumble enough, they can be removed from FV and replaced with other First Trust sector and industry funds displaying better relative strength traits.
Data suggest FV can outperform the S&amp;P 500, but it potentially does with more volatility.
<h3>A Look Back At FV's 'Wild Ride'</h3>
FV &ldquo;has been on a wild ride since its inception. From March 31, 2014, through Aug. 31, 2016, FV&rsquo;s annualized total return was 8.95 percent, marginally higher than that experienced by Vanguard 500 Index Fund (NYSE: <a class="ticker" href="/stock/voo#NYSE">VOO</a>),&rdquo; said Morningstar <a href="http://beta.morningstar.com/articles/776047/fickle-investors-have-missed-out-on-this-etfs-momentum-strategy.html">in a recent note</a>. &ldquo;However, FV&rsquo;s standard deviation of monthly returns during that span was 14.9 percent, versus just 11.1 percent for VOO. Also, FV&rsquo;s maximum drawdown during the period was 18.7 percent, more than twice that suffered by VOO shareholders (8.4 percent).&rdquo;
Again, FV is a passive ETF that can and does alter its holdings. Some investors can quibble with how the ETF sends its holdings packing and adds new ones. They might have a point. For example, FV dumped the First Trust NYSE Arca Biotchnlgy Indx Fd (NYSE: <a class="ticker" href="/stock/fbt#NYSE">FBT</a>) <a href="http://www.benzinga.com/trading-ideas/long-ideas/16/02/6224696/popular-etf-of-etfs-gets-defensive-after-market-slide">earlier this year </a>in favor of the First Trust Utilities AlphaDEX Fnd (ETF) (NYSE: <a class="ticker" href="/stock/fxu#NYSE">FXU</a>).
FV held onto FBT through a major decline and by sending the ETF packing when it did, FV has missed out on a biotech rebound only to be holding FXU while utilities stocks are giving up big chunks of the gains accrued earlier this year.
FV has been propped by the First Trust DJ Internet Index Fund (ETF)(NYSE: <a class="ticker" href="/stock/fdn#NYSE">FDN</a>), which is FV&#39;s largest holding at over 23 percent of the momentum fund&#39;s weight. FDN, the largest U.S. internet ETF, has recently been making a series of all-time highs.
That has not been enough to keep investors interested as highlighted by the $1.57 billion that has been yanked from FV this year.
&ldquo;While FV returned nearly 9 percent annualized, its investor return over the period in question was actually negative 2.3 percent! While FV kept pace with the S&amp;P 500, the average dollar invested in the fund actually lost money. Momentum strategies have merit, but investors&rsquo; ability to effectively harness this fickle factor correlates directly with their intestinal fortitude,&rdquo; added Morningstar.

Short Ideas

First Trust NYSE Arca Biotechnology Index Fund

Once Beloved Momentum ETF Loses Its Momo

The First Trust Dorsey Wright Focus 5 ETF (NASDAQ: <a class="ticker" href="/stock/fv#NASDAQ">FV</a>), one of the most popular funds using the ETF of ETFs strategy, recently made another change among its five holdings.

	FV&#39;s<a href="http://www.ftportfolios.com/Retail/Etf/EtfHoldings.aspx?Ticker=FV"> holdings page </a>shows the First Trust Energy AlphaDEX Fund (NYSE: <a class="ticker" href="/stock/fxn#NYSE">FXN</a>) as FV&#39;s fifth-largest holding at a weight of 19.8 percent. That means FV has sent the First Trust Health Care AlphaDEX Fund (NYSE: <a class="ticker" href="/stock/fxh#NYSE">FXH</a>) packing.&nbsp;

	Flows data confirm as much. From March 23 through March 29, FXN added $680.1 million in new assets, more than any other ETF over that period, according to <a href="http://www.etf.com/etfanalytics/etf-fund-flows-tool">ETF.com</a> data. Conversely, FXH lost $562.3 million in assets during that stretch, more than all but one ETF.&nbsp;

	FV turned two earlier this month and had not changed its lineup until last month when it dumped the First Trust NYSE Arca Biotechnology Index Fund (NYSE: <a class="ticker" href="/stock/fbt#NYSE">FBT</a>) for the First Trust Utilities AlphaDEX Fund (NYSE: <a class="ticker" href="/stock/fxu#NYSE">FXU</a>). That move came after a massive decline for FBT.

	A similar though not as drastic scenario is seen with FV&#39;s healthcare-for-energy swap with FXN replacing FXH. FXH, the healthcare ETF, has long had a significant portion of its lineup in biotech stocks. Like more traditional, diversified healthcare ETFs, FXH was not immune to the biotech sector&#39;s tumble that started last year. Even with a 4.6 percent gain over the past month, FXH is down nearly 19 percent over the past year.

	That means the ETF is still close to meeting the definition of a bear market. While FV is not a market timing ETF, it is not unreasonable to assume of the fund&#39;s devotees, of which there are plenty given its $3.4 billion in assets, are wondering why it takes so long to part with losing positions like FBT and FXH. Frankly, those positions got worse and worse <a href="http://www.benzinga.com/trading-ideas/long-ideas/16/02/6224696/popular-etf-of-etfs-gets-defensive-after-market-slide">before FV moved out of them</a>.

	Those are just two examples and here is another. From its 2015 peak to its 2016 trough, the First Trust Dow Jones Internet Index Fund (NYSE: <a class="ticker" href="/stock/fdn#NYSE">FDN</a>), FV&#39;s largest holding, lost more than 28 percent but the Internet fund was not removed from FV.

	In fact, since FV debuted, FDN has experienced multiple corrections (defined as a drop of 10 percent or more) and at least one bear market (albeit temporary) and the Internet fund has never left FV.

Intraday Update

Focus 5 ETF Makes Another Change

The First Trust Dorsey Wright Focus 5 ETF (First Trust Exchange Traded Fund VI (NASDAQ: <a class="ticker" href="/stock/fv#NASDAQ">FV</a>)), one of the stars of 2014&#39;s crop of rookie exchange-traded funds, now has a dynamic counterpart with last week&#39;s launch of the First Trust Dorsey Wright Dynamic Focus 5 ETF (NASDAQ: FVC).
Like FV, the First Trust Dorsey Wright Dynamic Focus 5 ETF holds, in order, the First Trust Consumer Disry Alpha Fnd (ETF) (NYSE: <a class="ticker" href="/stock/fxd#NYSE">FXD</a>), First Trust DJ Internet Index Fund (ETF) (NYSE: <a class="ticker" href="/stock/fdn#NYSE">FDN</a>), First Trust Cnsumer Stapl Alpha Fd (ETF) (NYSE: <a class="ticker" href="/stock/fxg#NYSE">FXG</a>), First Trust Utilities AlphaDEX Fnd (ETF) (NYSE: <a class="ticker" href="/stock/fxu#NYSE">FXU</a>) and the First Trust Health Care AlphaDEX Fd(ETF) (NYSE: <a class="ticker" href="/stock/fxh#NYSE">FXH</a>).
<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/trading-ideas/long-ideas/16/03/7665385/a-new-muti-asset-etf-of-etfs">A New Multi-Asset ETF Of ETFs</a></bzrelatedlink>
<h3>The Differences Between FV And FVC</h3>
While those ETFs represent all of FV&#39;s lineup, they combine for about 60 percent of the new FVC. The rest of FVC&#39;s lineup is allocated to <a href="http://www.ftportfolios.com/Retail/Etf/EtfHoldings.aspx?Ticker=FVC">short-term U.S. T-bills</a>.
The relative strength analysis for FVC&#39;s equity ETFs is conducted on a bi-monthly basis as is the analysis for the ETF&#39;s cash holdings, according to Illinois-based <a href="http://www.ftportfolios.com/LoadContent/gr3ukptsgaho">First Trust</a>.
Though FV is considered a passively managed ETF, relative strength analysis of its constituent ETFs is conducted weekly, meaning if one (or more) of the holdings tumble enough, they can be removed from FV and replaced with other First Trust sector and industry funds displaying better relative strength traits.
FV&#39;s ability to change holdings was on display earlier this year when it dumped the First Trust NYSE Arca Biotchnlgy Indx Fd (NYSE: <a class="ticker" href="/stock/fbt#NYSE">FBT</a>) in favor of FXU. However, that move left many FV investors what took so long as FV endured a massive slide in biotech stocks before parting ways to with FBT.
FVC has its work cut out for it when it comes to competing with FV, which has over $3.4 billion in assets under management. However, the new FVC is slightly less expensive than FV, as the former charges 0.79 percent per year, or $79 for each $10,000 invested, compared with FV&#39;s annual expense ratio of 0.89 percent.
Image Credit: <a href="https://pixabay.com/en/welcome-quote-sign-poster-998360/">Public Domain</a>

First Trustnsumer Discretionary AlphaDEX Fund

Focus 5 ETF Gets A Dynamic Counterpart

The First Trust Dorsey Wright Focus 5 ETF (First Trust Exchange Traded Fund VI (NASDAQ: <a class="ticker" href="/stock/fv#NASDAQ">FV</a>)) is reportedly dumping some of its riskier holdings in favor of more conservative fare as the S&amp;P 500 has tumbled 8 percent year to date.
<h3>FV Is An ETF Of ETFs</h3>
Since coming to market in March 2014, FV has held the same five First Trust industry and sector ETFs. Those funds are as follows:
<ul>
<li>First Trust NYSE Arca Biotchnlgy Indx Fd (NYSE: <a class="ticker" href="/stock/fbt#NYSE">FBT</a>)</li>
<li>First Trust DJ Internet Index Fund (ETF) (NYSE: <a class="ticker" href="/stock/fdn#NYSE">FDN</a>)</li>
<li>First Trust Cnsumer Stapl Alpha Fd (ETF) (NYSE: <a class="ticker" href="/stock/fxg#NYSE">FXG</a>)</li>
<li>First Trust Health Care AlphaDEX Fd(ETF) (NYSE: <a class="ticker" href="/stock/fxh#NYSE">FXH</a>)</li>
<li>First Trust Cnsmer Disry Alpha Fnd (ETF) (NYSE: <a class="ticker" href="/stock/fxd#NYSE">FXD</a>)</li>
</ul>

<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/trading-ideas/long-ideas/16/02/6224695/an-etf-thats-a-good-value-for-value-stocks">An ETF That's A Good Value For Value Stocks</a></bzrelatedlink>
That was FV&#39;s lineup as of February 4, according to <a href="http://www.ftportfolios.com/Retail/Etf/EtfHoldings.aspx?Ticker=FV">First Trust data</a>.
<h3>An Appreciated Switch</h3>
Citing market evidence and ETF market makers,<a href="http://blogs.barrons.com/focusonfunds/2016/02/05/big-dorsey-wright-etf-gets-defensive-after-sharp-drop/"> Barron&#39;s</a> reported FV made its first change last week, swapping out of FBT for the First Trust Utilities AlphaDEX Fnd (ETF) (NYSE: <a class="ticker" href="/stock/fxu#NYSE">FXU</a>). The change is welcome, but it probably also leaves FV investors wondering what took so long.
FBT, the second-largest biotech ETF by assets, has lost a third of its value in the past six months and more than 24 percent in just the past month. Market data suggest the Barron&#39;s report about FV dumping FBT in favor of FXU is accurate. For example, FBT&#39;s volume swelled 17.1 million shares on Friday compared to the ETF&#39;s 90-day average of just over 531,300. FXU&#39;s Friday volume was a staggering 48.3 million compared to a 90-day average of less than 519,000 shares.
Though FV is considered a passively managed ETF, relative strength analysis of its constituent ETFs is conducted weekly, meaning if one (or more) of the holdings tumble enough, they can be removed from FV and replaced with other First Trust sector and industry funds displaying better relative strength traits.
<h3>The Bottom Line</h3>
FV, an ETF beloved by advisors and investors that are followers of Dorsey Wright&#39;s momentum-based, relative strength strategies, is home to over $3.6 billion in assets under management, making it one of the most successful ETFs to come to market in 2014. However, investors have pulled nearly $448 million from the ETF this year. 
Image Credit: <a href="https://pixabay.com/en/stock-exchange-trading-floor-738671/">Public Domain</a>

Popular ETF Of ETFs Gets Defensive After Market Slide

Big winners (up at least 5%): Direxion Daily Gold Miners Bear 3X Shares (NYSE: <a class="ticker" href="/stock/dust#NYSE">DUST</a>), VelocityShares 3x Inverse Natural Gas ETN (NYSE: <a class="ticker" href="/stock/dgaz#NYSE">DGAZ</a>) and the iPath Pure Beta Crude Oil ETN (NYSE: <a class="ticker" href="/stock/olem#NYSE">OLEM</a>).

	Big winners (down at least 5%): Direxion Daily Gold Miners Bull 3X Shares (NYSE: <a class="ticker" href="/stock/nugt#NYSE">NUGT</a>), iShares MSCI Emerging Markets Value ETF (NYSE: <a class="ticker" href="/stock/eval#NYSE">EVAL</a>) and the VelocityShares 3x Long Natural Gas ETN (NYSE: <a class="ticker" href="/stock/ugaz#NYSE">UGAZ</a>).

	Unusual volume (at least 5X ADV): iShares Utilities ETF (NYSE: <a class="ticker" href="/stock/idu#NYSE">IDU</a>), First Trust Utilities AlphaDEX Fund (NYSE: <a class="ticker" href="/stock/fxu#NYSE">FXU</a>), iShares MSCI Germany Small Cap ETF (NYSE: <a class="ticker" href="/stock/ewgs#NYSE">EWGS</a>), iShares MSCI USA ETF (NYSE: <a class="ticker" href="/stock/eusa#NYSE">EUSA</a>), SPDR S&amp;P Emerging Europe ETF (NYSE: <a class="ticker" href="/stock/gur#NYSE">GUR</a>), PowerShares Water Resources (NYSE: <a class="ticker" href="/stock/pho#NYSE">PHO</a>) and the Vanguard Industrials ETF (NYSE: <a class="ticker" href="/stock/vis#NYSE">VIS</a>).

	Must reads of the day:

	CNN Money: <a href="http://money.cnn.com/2013/09/23/investing/ipos-2013/index.html?section=money_markets&amp;utm_source=feedburner&amp;utm_medium=feed&amp;utm_campaign=Feed%3A+rss%2Fmoney_markets+%28Markets%29">The IPO market is stronger than you think</a>.

	Reformed Broker: <a href="http://www.thereformedbroker.com/2013/09/22/the-investment-case-for-africa/">Presents the case for investing in Africa</a>.

	All-Star Charts takes a look at what you can expect <a href="http://allstarcharts.com/from-false-moves-come-fast-moves/">false moves or failed breakouts/breakdowns</a>

	The Philippines <a href="http://www.benzinga.com/trading-ideas/long-ideas/13/09/3932583/taper-or-not-4-reasons-the-philippines-etf-will-shine-again">remains a shining star</a> that could shine brighter still.

	Bloomberg: Coffee <a href="http://www.bloomberg.com/news/2013-09-23/coffee-bears-double-bets-on-lower-robusta-price-on-vietnam-crop.html">bear market getting worse</a>.

	The Emmy Awards <a href="http://www.benzinga.com/trading-ideas/long-ideas/13/09/3934970/emmy-awards-do-nothing-for-relevant-etfs">were a non-event for some ETFs</a>.

	Don't forget to follow me on Twitter <a href="https://twitter.com/ETFProfessor1">@ETFProfessor1</a>.

Emerging Market ETFs

Currency ETFs

After-Hours Center

DGAZ

DUST

EUSA

EVAL

EWGS

iShares Trust Dow Jones US Utilities Sector Index Fund

NUGT

OLEM

PowerShares Exchange Traded Fund Water Resource Portfolio

UGAZ

Benzinga's Mandatory ETF Reading for September 23, 2013

Big winners (up at least 5%): VelocityShares 3x Long Natural Gas ETN (NYSE: <a class="ticker" href="/stock/ugaz#NYSE">UGAZ</a>).

	Big losers (down at least 5%): VelocityShares 3x Inverse Natural Gas ETN (NYSE: <a class="ticker" href="/stock/dgaz#NYSE">DGAZ</a>).

	Unusual volume (at least 5X ADV): Global X China Energy ETF (NYSE: <a class="ticker" href="/stock/chie#NYSE">CHIE</a>), iShares MSCI Poland Investable Market ETF (NYSE: <a class="ticker" href="/stock/epol#NYSE">EPOL</a>), First Trust AlphaDEX Utilities Fund (NYSE: <a class="ticker" href="/stock/fxu#NYSE">FXU</a>), iShares US Utilities ETF (NYSE: <a class="ticker" href="/stock/idu#NYSE">IDU</a>), Global X Social Media Index ETF (NASDAQ: <a class="ticker" href="/stock/socl#NASDAQ">SOCL</a>) and the PowerShares Dynamic Utilities ETF (NYSE: <a class="ticker" href="/stock/pui#NYSE">PUI</a>).

	Must reads of the day:

	Fabian Capital Management: Building an <a href="http://fabiancm.com/build-low-cost-etf-portfolio/">ETF portfolio for cheapskates</a>.

	ETF Trends: China ETFs <a href="http://www.etftrends.com/2013/09/china-etfs-could-extend-gains-on-demarks-comments/">could keep climbing</a> if this technical analyst is correct.

	ETF Trends: Some guy named <a href="http://www.etftrends.com/2013/09/for-a-minute-summers-could-help-em-etfs-ignore-tapering/">Summers and Fed tapering</a>.

	Barron's: Money is <a href="http://blogs.barrons.com/focusonfunds/2013/09/16/return-of-the-emerging-markets-investor-ishares-eem-sees-huge-cash-inflows/">is returning to emerging markets ETFs</a>.

	The Alibaba IPO <a href="http://www.benzinga.com/trading-ideas/long-ideas/13/09/3916110/not-just-twitter-another-ipo-could-jolt-these-etfs">is important to Internet ETFs,too</a>.

	Checking in <a href="http://www.benzinga.com/trading-ideas/long-ideas/13/09/3915871/dueling-views-on-hong-kong-etfs">with Hong Kong</a>.

	BlackRock/iShares: The <a href="http://www.blackrockblog.com/2013/09/13/paradox-fed-qe-tapering/">Paradox in Fed QE Tapering</a>.

CHIE

iShares MSCI Poland Investable Market Index Fund ETF

EPOL

PowerShares ETF Trust Dynamic Utilities Portfolio

SOCL

Benzinga's Mandatory ETF Reading for September 16, 2013

Here is the ETF Professor's ETF Watch List for Friday, August 30, 2013.

Keep an eye on the PowerShares DB Crude Oil Double Short ETN (NYSE: <a class="ticker" href="/stock/dto#NYSE">DTO</a>).

The ProShares UltraShort S&amp;P 500 (NYSE: <a class="ticker" href="/stock/sds#NYSE">SDS</a>) should be monitored.

Give the First Trust Utilities AlphaDEX Fund (NYSE: <a class="ticker" href="/stock/fxu#NYSE">FXU</a>) a look.

The Market Vectors Junior Gold Miners ETF (NYSE: <a class="ticker" href="/stock/gdxj#NYSE">GDXJ</a>) should be in play, as always.

Emerging markets plays of the day: iShares MSCI Chile ETF (NYSE: <a class="ticker" href="/stock/ech#NYSE">ECH</a>), iShares MSCI Taiwan ETF (NYSE: <a class="ticker" href="/stock/ewt#NYSE">EWT</a>) and the Market Vectors Indonesia ETF (NYSE: <a class="ticker" href="/stock/idx#NYSE">IDX</a>).

Forex play of the day: CurrencyShares Canadian Dollar Trust (NYSE: <a class="ticker" href="/stock/fxc#NYSE">FXC</a>).

Bond play of the day: Vanguard Short-Term Bond ETF (NYSE: <a class="ticker" href="/stock/bsv#NYSE">BSV</a>).

Pre-Market Outlook

PowerShares DB Crude Oil Double Short ETN

GDXJ

ETFs to Watch August 30, 2013 (BSV, DTO, GDXJ)

<div class="entry-content">

		Check out my latest <a href="http://blog.newconstructs.com/wp-content/uploads/2012/12/121210-Danger-Zone.mp3" target="_blank">Danger Zone interview</a> with Chuck Jaffe of MarketWatch.com.

		The utilities sector is in the Danger Zone this week.

		Out of the 87 stocks we cover in the sector, only one gets and Attractive or better rating. The rest are rated Neutral (42), Dangerous (40) or Very Dangerous (4).

		As dividend-yield-chasing investors have bid up the prices of utilities stocks, ETFs and funds, too many of them have overlooked the capital risk in those investments. My research shows that utilities stocks are meaningfully overbought. At some point, all the momentum driving up the prices of utilities stocks will stall and reverse. At which point, utilities investors could be facing major losses. I recommend investors do their diligence on all stocks, especially utilities in order to avoid the terrible downside that comes with making unsound investment decisions.

		The <a href="http://blog.newconstructs.com/2012/10/11/best-worst-etfs-mutual-funds-utilities-sector-3/" target="_blank">utilities sector</a> ranks ninth out of the ten sectors as detailed in my <a href="http://blog.newconstructs.com/2012/10/08/sector-rankings-for-etfs-mutual-funds/">sector rankings for ETFs and mutual funds</a>. Investors should not buy any utilities ETFs or mutual funds because none get an Attractive-or-better rating. If you must have exposure to this sector, you should buy a basket of Attractive-or-better rated stocks and avoid paying undeserved fund fees.

		The figure shows that eight out of the 135 stocks (4% of the total net assets) held by utilities ETFs and mutual funds get an Attractive-or-better rating. However, none of the eight utilities ETFs or 40 utilities mutual funds get an Attractive-or-better rating. Note that utilities ETFs and mutual funds hold stocks that we do not classify as a utility. Hence, the 135 different stocks in these funds are greater than the 87 utilities we cover due to style drift. Unfortunately, only 7 of the additional 48 non-utilities stocks in the utilities funds get an Attractive or better rating.

		The takeaways are: utilities mutual fund managers allocate too much capital to low-quality stocks and utilities ETFs hold poor quality stocks.
<div>

			Figure: Utilities Sector Landscape For ETFs, Mutual Funds &amp; Stocks
</div>
<div>

			<a href="http://blog.newconstructs.com/wp-content/uploads/2012/10/UtilitiesFig3.jpg"><img alt="" height="156" src="http://blog.newconstructs.com/wp-content/uploads/2012/10/UtilitiesFig3.jpg" title="UtilitiesFig3" width="405" /></a>

			Sources: New Constructs, LLC and company filings
</div>

		As detailed in &ldquo;<a href="http://blog.newconstructs.com/2012/07/20/low-cost-funds-dupe-investors-2/">Cheap Funds Dupe Investors</a>&rdquo;, the fund industry offers many cheap funds but very few funds with high-quality stocks, or with what I call good <a href="http://blog.newconstructs.com/2011/11/22/portfolio-management-rating-methodology/">portfolio management</a>.

		Per my 4Q report on the <a href="http://blog.newconstructs.com/2012/10/11/best-worst-etfs-mutual-funds-utilities-sector-3/">Best &amp; Worst Utilities ETFs and Mutual funds</a>, which is based on aggregation of ratings of eight ETFs and 40 mutual funds in the utilities sector as of October 11, 2012.

		First Trust Utilities AlphaDEX Fund (NYSE: <a class="ticker" href="/stock/fxu#NYSE">FXU</a>) is my top-rated Utilities ETF and earns my Dangerous rating. &nbsp;American Century Quantitative Equity Funds, Inc: Utilities Fund (NYSE: <a class="ticker" href="/stock/bulix#NYSE">BULIX</a>) is my top-rated Utilities mutual fund and earns my Neutral rating.

		Rydex S&amp;P Equal Weight Utilities ETF (NYSE: <a class="ticker" href="/stock/ryu#NYSE">RYU</a>) is my worst-rated Utilities ETF and earns my Dangerous rating. &nbsp;Rydex Series Funds: Utilities Fund (NYSE: RYUTX) is my worst-rated Utilities mutual fund and earns my Very Dangerous rating.

		Public Service Electric &amp; Gas Company (NYSE: <a class="ticker" href="/stock/peg#NYSE">PEG</a>) is one of my favorite stocks held by Utilities ETFs and mutual funds and earns my Attractive rating. PEG is a rarity in the Utilities sector &ndash; it is in the only company in the Utilities sector to earn an Attractive-or-better rating, and is a business with positive economic earnings and a cheap valuation. PEG has generated a return on invested capital (<a href="http://www.newconstructs.com/nc/help/glossary.htm#roicDef">ROIC</a>) above its weighted average cost of capital (<a href="http://www.newconstructs.com/nc/help/glossary.htm#helpWacc">WACC</a>) in five of the last six years. Its current stock price (~$32.48) implies the company&rsquo;s after-tax profits (<a href="http://www.newconstructs.com/nc/help/glossary.htm#nopat">NOPAT</a>) will permanently decline by 30%. The market is setting a low bar, and PEG has demonstrated that it can grow NOPAT.

		Integrys Energy Group, Inc. (NYSE: <a class="ticker" href="/stock/teg#NYSE">TEG</a>) is one of my least favorite stocks held by Utilities ETFs and mutual funds and earns my Very Dangerous rating. TEG is a value destroyer that has generated negative <a href="http://www.newconstructs.com/nc/help/glossary.htm#epDef">economic earnings</a> for all but one of the last 15 years. To justify its current stock price (~$55.29), TEG must increase profits by 9.5% compounded annually for the next 15 years. Growth like this is unlikely given the history of poor performance, a mature market, and the regulation faced by all Utilities.

		Disclosure: I receive no compensation to write about any specific stock or theme.
</div>

BULIX

Rydex ETF Trust Rydex S&P Equal Weight Utilities ETF

The Danger Zone Pick: 12/10/12

<div class="entry-content">

		The Utilities sector ranks ninth out of the ten sectors as detailed in my <a href="http://blog.newconstructs.com/2012/10/08/sector-rankings-for-etfs-mutual-funds/">sector rankings for ETFs and mutual funds</a>. It gets my Dangerous rating, which is based on aggregation of ratings of eight ETFs and 40 mutual funds in the Utilities sector as of October 11, 2012. Prior reports on the best &amp; worst ETFs and mutual funds in every sector and style are <a href="http://www.newconstructs.com/nc/research/report/etf-and-fund-reports.htm">here</a>.

		Figure 1 ranks from best to worst all eight Utilities ETFs and Figure 2 shows the five best and worst-rated Utilities mutual funds. Not all Utilities sector ETFs and mutual funds are created the same. The number of holdings varies widely (from 22 to 80), which creates drastically different investment implications and ratings. The best ETFs and mutual funds allocate more value to Attractive-or-better-rated stocks than the worst ETFs and mutual funds, which allocate too much value to Neutral-or-worse-rated stocks.

		To <a href="http://blog.newconstructs.com/2012/10/09/how-to-find-the-best-etfs-2/">identify the best</a> and <a href="http://blog.newconstructs.com/2012/04/05/how-to-avoid-the-worst-etfs/">avoid the worst</a> ETFs and mutual funds within the Utilities sector, investors need a <a href="http://blog.newconstructs.com/2011/11/23/predictive-fund-rating-methodology/">predictive rating</a> based on (1) <a href="http://blog.newconstructs.com/2011/11/22/portfolio-management-rating-methodology/">stocks ratings</a> of the holdings and (2) the <a href="http://blog.newconstructs.com/2011/10/28/total-annual-costs-methodology/">all-in expenses</a> of each ETF and mutual fund. Investors need not rely on backward-looking ratings. My fund rating methodology is detailed <a href="http://blog.newconstructs.com/2011/11/23/predictive-fund-rating-methodology/">here</a>.

		Investors should not buy any Utilities ETFs or mutual funds because none get an Attractive-or-better rating. If you must have exposure to this sector, you should buy a basket of Attractive-or-better rated stocks and avoid paying undeserved fund fees. Active management has a <a href="http://blog.newconstructs.com/2012/09/17/less-than-1-of-managers-deliver-alpha-here-are-details/">long history</a> of not paying off.

		Get my ratings on all ETFs and mutual funds in this sector on my free <a href="http://www.newconstructs.com/nc/fundscreener/fund-screener.htm?task=ACTION_CATEGORY_TYPE_SEARCH&amp;selectedTypes=0,1&amp;selectedCategoryIds=5d8c9f84114e11e1b5c000188b533b34">mutual fund and ETF screener</a>.
<div>

			Figure 1: ETFs with the Best &amp; Worst Ratings
</div>

		<a href="http://blog.newconstructs.com/wp-content/uploads/2012/10/UtilitiesFig1.jpg"><img alt="" class="aligncenter size-full wp-image-4744" height="223" src="http://blog.newconstructs.com/wp-content/uploads/2012/10/UtilitiesFig1.jpg" title="UtilitiesFig1" width="324" /></a>

		* Best ETFs exclude ETFs with TNA&rsquo;s less than 100 million for inadequate liquidity.
<div>

			Sources: New Constructs, LLC and company filings
</div>
<div>

			Figure 2: Mutual Funds with the Best &amp; Worst Ratings &ndash; Top 5
</div>

		<a href="http://blog.newconstructs.com/wp-content/uploads/2012/10/UtilitiesFig2.jpg"><img alt="" class="aligncenter size-full wp-image-4743" height="246" src="http://blog.newconstructs.com/wp-content/uploads/2012/10/UtilitiesFig2.jpg" title="UtilitiesFig2" width="329" /></a>

		* Best mutual funds exclude funds with TNA&rsquo;s less than 100 million for inadequate liquidity.
<div>

			Sources: New Constructs, LLC and company filings
</div>

		First Trust Utilities AlphaDEX Fund (NYSE: <a class="ticker" href="/stock/fxu#NYSE">FXU</a>) is my top-rated Utilities ETF and earns my Dangerous rating. &nbsp;American Century Quantitative Equity Funds, Inc: Utilities Fund (NYSE: <a class="ticker" href="/stock/bulix#NYSE">BULIX</a>) is my top-rated Utilities mutual fund and earns my Neutral rating.

		Rydex S&amp;P Equal Weight Utilities ETF (NYSE: <a class="ticker" href="/stock/ryu#NYSE">RYU</a>) is my worst-rated Utilities ETF and earns my Dangerous rating. &nbsp;Rydex Series Funds: Utilities Fund (NYSE: RYUTX) is my worst-rated Utilities mutual fund and earns my Very Dangerous rating.

		Figure 3 shows that eight out of the 135 stocks (4% of the total net assets) held by Utilities ETFs and mutual funds get an Attractive-or-better rating. However, none of the eight Utilities ETFs or 40 Utilities mutual funds get an Attractive-or-better rating.

		The takeaways are: mutual fund managers allocate too much capital to low-quality stocks and Utilities ETFs hold poor quality stocks.
<div>

			Figure 3: Utilities Sector Landscape For ETFs, Mutual Funds &amp; Stocks
</div>
<div>

			<a href="http://blog.newconstructs.com/wp-content/uploads/2012/10/UtilitiesFig3.jpg"><img alt="" class="aligncenter size-full wp-image-4742" height="156" src="http://blog.newconstructs.com/wp-content/uploads/2012/10/UtilitiesFig3.jpg" title="UtilitiesFig3" width="405" /></a>

			Sources: New Constructs, LLC and company filings
</div>

		As detailed in &ldquo;<a href="http://blog.newconstructs.com/2012/07/20/low-cost-funds-dupe-investors-2/">Cheap Funds Dupe Investors</a>&rdquo;, the fund industry offers many cheap funds but very few funds with high-quality stocks, or with what I call good <a href="http://blog.newconstructs.com/2011/11/22/portfolio-management-rating-methodology/">portfolio management</a>.

		Investors need to tread carefully when considering Utilities ETFs and mutual funds, as none are rated Attractive or better. &nbsp;Focus on individual stocks instead.

		Public Service Electric &amp; Gas Company (NYSE: <a class="ticker" href="/stock/peg#NYSE">PEG</a>) is one of my favorite stocks held by Utilities ETFs and mutual funds and earns my Attractive rating. PEG is a rarity in the Utilities sector &ndash; it is in the only company in the Utilities sector to earn an Attractive-or-better rating, and is a business with positive economic earnings and a cheap valuation. PEG has generated a return on invested capital (<a href="http://www.newconstructs.com/nc/help/glossary.htm#roicDef">ROIC</a>) above its weighted average cost of capital (<a href="http://www.newconstructs.com/nc/help/glossary.htm#helpWacc">WACC</a>) in five of the last six years. Its current stock price (~$32.48) implies the company&rsquo;s after-tax profits (<a href="http://www.newconstructs.com/nc/help/glossary.htm#nopat">NOPAT</a>) will permanently decline by 30%. The market is setting a low bar, and PEG has demonstrated that it can grow NOPAT.

		Integrys Energy Group, Inc. (NYSE: <a class="ticker" href="/stock/teg#NYSE">TEG</a>) is one of my least favorite stocks held by Utilities ETFs and mutual funds and earns my Very Dangerous rating. TEG is a value destroyer that has generated negative <a href="http://www.newconstructs.com/nc/help/glossary.htm#epDef">economic earnings</a> for all but one of the last 15 years. To justify its current stock price (~$55.29), TEG must increase profits by 9.5% compounded annually for the next 15 years. Growth like this is unlikely given the history of poor performance, a mature market, and the regulation faced by all Utilities.

		88 stocks of the 3000+ I cover are classified as Utilities stocks, but due to style drift, Utilities ETFs and mutual funds hold 135 stocks.

		Figures 4 and 5 show the rating landscape of all Utilities ETFs and mutual funds.

		Our <a href="http://blog.newconstructs.com/2012/10/08/sector-rankings-for-etfs-mutual-funds/">sector rankings for ETFs and mutual funds</a> report ranks all sectors and highlights those that offer the best investments.
<div>

			Figure 4: Separating the Best ETFs From the Worst ETFs
</div>
<div>

			<a href="http://blog.newconstructs.com/wp-content/uploads/2012/10/UtilitiesFig4.jpg"><img alt="" class="aligncenter size-full wp-image-4741" height="245" src="http://blog.newconstructs.com/wp-content/uploads/2012/10/UtilitiesFig4.jpg" title="UtilitiesFig4" width="409" /></a>

			Sources: New Constructs, LLC and company filings
</div>
<div>

			Figure 5: Separating the Best Mutual Funds From the Worst Mutual Funds
</div>
<div>

			<a href="http://blog.newconstructs.com/wp-content/uploads/2012/10/UtilitiesFig5.jpg"><img alt="" class="aligncenter size-full wp-image-4740" height="245" src="http://blog.newconstructs.com/wp-content/uploads/2012/10/UtilitiesFig5.jpg" title="UtilitiesFig5" width="409" /></a>

			Sources: New Constructs, LLC and company filings
</div>

		Review my <a href="http://www.newconstructs.com/nc/fundscreener/fund-screener.htm?task=ACTION_CATEGORY_TYPE_SEARCH&amp;selectedTypes=0,1&amp;selectedCategoryIds=5d8c9f84114e11e1b5c000188b533b34">full list</a> of ratings and rankings along with reports on all eight ETFs and 40 mutual funds in the Utilities sector.

		Disclosure: I receive no compensation to write about any specific stock, sector or&nbsp;theme.
</div>

Best & Worst ETFs & Mutual Funds: Utilities Sector

<div class="entry-content">

		The Utilities sector ranks eighth out of the ten sectors as detailed in my <a href="http://blog.newconstructs.com/2012/07/10/roadmap-to-the-best-worst-etf-mutual-fund-sectors/">sector roadmap</a>. 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. Reports on the best &amp; worst ETFs and mutual funds in every sector and style are <a href="http://www.newconstructs.com/nc/research/report/etf-and-fund-reports.htm">here</a>.

		Figure 1 ranks from best to worst the eight Utilities ETFs that meet our liquidity standards and Figure 2 shows the five best and worst-rated Utilities mutual funds. Not all Utilities sector ETFs and mutual funds are created the same. The number of holdings varies widely (from 22 to 83), which creates drastically different investment implications and ratings. The best ETFs and mutual funds allocate more value to Attractive-or-better-rated stocks than the worst ETFs and mutual funds, which allocate too much value to Neutral-or-worse-rated stocks.

		To <a href="http://blog.newconstructs.com/2012/04/03/how-to-find-the-best-etfs/">identify the best</a> and <a href="http://blog.newconstructs.com/2012/04/05/how-to-avoid-the-worst-etfs/">avoid the worst</a> ETFs and mutual funds within the Utilities sector, investors need a <a href="http://blog.newconstructs.com/2011/11/23/predictive-fund-rating-methodology/">predictive rating</a> based on (1) <a href="http://blog.newconstructs.com/2011/11/22/portfolio-management-rating-methodology/">stocks ratings</a> of the holdings and (2) the <a href="http://blog.newconstructs.com/2011/10/28/total-annual-costs-methodology/">all-in expenses</a> of each ETF and mutual fund. Investors need not rely on backward-looking ratings. My fund rating methodology is detailed <a href="http://blog.newconstructs.com/2011/11/23/predictive-fund-rating-methodology/">here</a>.

		Investors should not buy any Utilities ETFs or mutual funds because none get an Attractive-or-better rating. If you must have exposure to this sector, you should buy a basket of Attractive-or-better rated stocks and avoid paying undeserved fund fees. Active management has a long <a href="http://blog.newconstructs.com/wp-content/uploads/2012/02/Failure-of-Active-Management1.pdf">history</a> of not paying off. Review my <a href="http://bit.ly/NfS0X9">free stock screener</a> to identify Attractive stocks in the Utilities sector.

		See ratings and reports on all ETFs and mutual funds in this sector on my free <a href="http://www.newconstructs.com/nc/fundscreener/fund-screener.htm?task=ACTION_CATEGORY_TYPE_SEARCH&amp;selectedTypes=0,1&amp;selectedCategoryIds=5d8c9f84114e11e1b5c000188b533b34">mutual fund and ETF screener</a>.
<div>

			Figure 1: ETFs with the Best &amp; Worst Ratings &ndash; Top 5 (where available)
</div>

		<a href="http://blog.newconstructs.com/wp-content/uploads/2012/07/Utilities1.jpg"><img alt="" class="aligncenter size-full wp-image-4211" height="212" src="http://blog.newconstructs.com/wp-content/uploads/2012/07/Utilities1.jpg" title="Utilities1" width="338" /></a>

		* Best ETFs exclude ETFs with TNA&rsquo;s less than 100 million for inadequate liquidity.
<div>

			Sources: New Constructs, LLC and company filings
</div>

		Focus Morningstar Utilities Index ETF (NYSE: <a class="ticker" href="/stock/fui#NYSE">FUI</a>) is excluded from Figure 1 because its total net assets (TNA) are below $100 million and do not meet our liquidity standards.
<div>

			Figure 2: Mutual Funds with the Best &amp; Worst Ratings &ndash; Top 5
</div>

		<a href="http://blog.newconstructs.com/wp-content/uploads/2012/07/Utilities2.jpg"><img alt="" class="aligncenter size-full wp-image-4210" height="235" src="http://blog.newconstructs.com/wp-content/uploads/2012/07/Utilities2.jpg" title="Utilities2" width="338" /></a>

		* Best mutual funds exclude funds with TNA&rsquo;s less than 100 million for inadequate liquidity.
<div>

			Sources: New Constructs, LLC and company filings
</div>

		Utilities Select Sector SPDR (NYSE: <a class="ticker" href="/stock/xlu#NYSE">XLU</a>) is my top-rated Utilities ETF and American Century Quantitative Equity Funds, Inc: Utilities Fund (NYSE: <a class="ticker" href="/stock/bulix#NYSE">BULIX</a>) is my top-rated Utilities mutual fund. Both earn my Neutral-or-worse rating and are not worth buying.

		First Trust Utilities AlphaDEX Fund (NYSE: <a class="ticker" href="/stock/fxu#NYSE">FXU</a>) is my worst-rated Utilities ETF and Rydex Series Funds: Utilities Fund (NYSE: RYUTX) is my worst-rated Utilities mutual fund. Both earn a Very Dangerous rating and should be avoided.

		Figure 3 shows the disappointing truth that only 9 out of the 141 stocks (5% of the total net assets) held by Utilities ETFs and mutual funds get an Attractive-or-better rating. There are not many good stocks in the sector, which is why none of the 9 ETFs and 33 mutual funds are worth buying.

		The takeaway is: quality stocks are required to create investment-worthy ETFs and mutual funds.
<div>

			Figure 3: Utilities Sector Landscape For ETFs, Mutual Funds &amp; Stocks 

			<a href="http://blog.newconstructs.com/wp-content/uploads/2012/07/Utilities3.jpg"><img alt="" class="aligncenter size-full wp-image-4209" height="156" src="http://blog.newconstructs.com/wp-content/uploads/2012/07/Utilities3.jpg" title="Utilities3" width="414" /></a>

			Sources: New Constructs, LLC and company filings
</div>

		As detailed in &ldquo;<a href="http://blog.newconstructs.com/2012/05/09/low-cost-funds-dupe-investors/">Cheap Funds Dupe Investors</a>&rdquo;, the fund industry offers many cheap funds but very few funds with high-quality stocks, or with what I call good <a href="http://blog.newconstructs.com/2011/11/22/portfolio-management-rating-methodology/">portfolio management</a>.

		Investors should avoid all ETFs and mutual funds in the Utilities sector. No ETFs and only 2 mutual funds earn a Neutral rating and are worth holding if already owned. All other ETFs and mutual funds should be sold. Investors requiring exposure to the Utilities sector are better off focusing on <a href="http://bit.ly/NfS0X9">individual stocks</a>.

		For example, Public Service Electric &amp; Gas Company (NYSE: <a class="ticker" href="/stock/peg#NYSE">PEG</a>) is one of my favorite stocks held by Utilities ETFs and mutual funds and earns my Attractive rating. PEG is a rarity in the Utilities sector &ndash; a business with positive economic earnings and a cheap valuation. PEG has generated a return on invested capital (<a href="http://www.newconstructs.com/nc/help/glossary.htm#roicDef">ROIC</a>) above its weighted average cost of capital (<a href="http://www.newconstructs.com/nc/help/glossary.htm#helpWacc">WACC</a>) in four of the last five years. Its current stock price (~$32.26) implies the company&rsquo;s after-tax profits (<a href="http://www.newconstructs.com/nc/help/glossary.htm#nopat">NOPAT</a>) will permanently decline by 40%. The market is setting a low bar, and PEG has demonstrated that it can grow NOPAT.

		IDACORP Inc. (NYSE: <a class="ticker" href="/stock/ida#NYSE">IDA</a>) is one of my least favorite stocks held by Utilities ETFs and mutual funds and earns my Very Dangerous rating. IDA is a value destroyer with an expensive valuation and is a prime example of why I&rsquo;m bearish on the Utilities sector. The company has generated negative <a href="http://www.newconstructs.com/nc/help/glossary.htm#epDef">economic earnings</a> every year since 1998, when my model starts. To justify its current stock price (~$42.93), IDA must increase profits by 7.2% compounded annually for the next 19 years. Growth like this is unlikely given a mature market and the regulation faced by all Utilities.

		91 stocks of the 3000+ I cover are classified as Utilities stocks, but due to style drift, Utilities ETFs and mutual funds hold 141 stocks.

		Figures 4 and 5 show the rating landscape of all Utilities ETFs and mutual funds.

		Our <a href="http://blog.newconstructs.com/2012/07/10/roadmap-to-the-best-worst-etf-mutual-fund-sectors/">sector roadmap</a> report ranks all sectors and highlights those that offer the best investments.
<div>

			Figure 4: Separating the Best ETFs From the Worst ETFs
</div>
<div>

			<a href="http://blog.newconstructs.com/wp-content/uploads/2012/07/Utilities4.jpg"><img alt="" class="aligncenter size-full wp-image-4208" height="245" src="http://blog.newconstructs.com/wp-content/uploads/2012/07/Utilities4.jpg" title="Utilities4" width="409" /></a>

			Sources: New Constructs, LLC and company filings
</div>
<div>

			Figure 5: Separating the Best Mutual Funds From the Worst Mutual Funds
</div>
<div>

			<a href="http://blog.newconstructs.com/wp-content/uploads/2012/07/Utilities5.jpg"><img alt="" class="aligncenter size-full wp-image-4207" height="245" src="http://blog.newconstructs.com/wp-content/uploads/2012/07/Utilities5.jpg" title="Utilities5" width="409" /></a>

			Sources: New Constructs, LLC and company filings
</div>

		Review my <a href="http://www.newconstructs.com/nc/fundscreener/fund-screener.htm?task=ACTION_CATEGORY_TYPE_SEARCH&amp;selectedTypes=0,1&amp;selectedCategoryIds=5d8c9f84114e11e1b5c000188b533b34">full list</a> of ratings and rankings along with free reports on all 9 ETFs and 33 mutual funds in the Utilities sector.

		isclosure: I receive no compensation to write about any specific stock, sector or&nbsp;theme.
</div>

Commodities

Topics

General

AXUT

WisdomTree Trust International Utilities Sector Fund

iShares S&P Global Industrial Sector Index Fund

PSCU

Top 10 Utilities ETFs

Unfortunately, there's no shortage of plain vanilla long ETFs that are in scary technical predicaments these days. One could write 100 tickers on little slips of paper, put the papers in a hat, draw blindly and probably pullout dozens of ETFs with foreboding charts.

Still, the technical pictures for some ETFs are far worse than they are for others. In these cases, the charts are almost screaming to investors “Don't buy now” or “Come back later for better prices.” 

Assuming the market's recent doldrums persist, the following ETFs could be in for even more downside pain than they've already experienced.

Market Vectors Brazil Small-Cap ETF (NYSE: <a class="ticker" href="/stock/brf#NYSE">BRF</a>):
Under no relevant time frame has the Market Vectors Brazil Small-Cap ETF performed well this year. We're talking past week, past month, quarter, year-to-date, etc. Already down almost 33% just since May, BRF is now fighting to hold support at $40. If this area is violated, the 2010 low around $34.50 could be the next destination.

Market Vectors Coal ETF (NYSE: <a class="ticker" href="/stock/kol#NYSE">KOL</a>):
The Market Vectors Coal ETF has spent the better part of two months violating a host of key technical areas. First, horizontal support at $45 failed. That was followed by the 50-day line dropping below the 200-day moving average. Then support at $37 failed. If support at $30, which KOL is currently flirting with, fails, we'll probably see the ETF back at $25 soon thereafter. 

IShares Dow Jones U.S. Oil Equipment Index Fund (NYSE: <a class="ticker" href="/stock/iez#NYSE">IEZ</a>):
The iShares Dow Jones U.S. Oil Equipment Index Fund is still home to great fundamentals and an impressive long-term outlook. The chart isn't as bad as BRF or KOL's, but it's not great either. IEZ must keep its head above water around $45 or risk a return to $40. A break below $40 could take the ETF back to the low $30s.

PowerShares Dynamic Technology ETF (NYSE: <a class="ticker" href="/stock/ptf#NYSE">PTF</a>):
The Nasdaq had been looking decent comparatively speaking until last week and that helped PTF a little bit. However, if this ETF cannot stay above $20, a retreat to the $16-$17 is possible. Unfortunately, options are not available on this fund.

First Trust AlphaDEX Utilities Fund (NYSE: <a class="ticker" href="/stock/fxu#NYSE">FXU</a>):
In the case of the First Trust AlphaDEX Utilities Fund, it's not that we expect a major decline immediately. Nor is that we're suddenly bearish on utilities, though the group is probably a tad overbought. The issue here is just a messy chart. There is some resistance just below $17.50 and assuming that is broken, FXU would have to fight a previous double top at $18.50. Worst case scenario is the ETF could challenge support at $15 if the market collapses further.

Technicals

iShares Dow Jones US Oil Equipment & Services Index Fund

Powershares Dynamic Technology Securitytor Portfolio

Five ETFs in Major Technical Danger

Looking for a little juice for the portfolio or dividends as a hedge against inflation? Then you might want to consider these seven dividend-paying utilities stocks that are up more than 15% year to date and trading near 52-week highs.

CenterPoint Energy (NYSE: <a class="ticker" href="/stock/cnp#NYSE">CNP</a>): Based in Houston and sporting a market cap of $8.6 billion, this diversified utility saw net cash flow from operations jump more than 30% in the most recent reporting period. The company has a 3.9% dividend yield and a long-term EPS growth forecast of 5.7%. The share price is up more than 28% year to date. The stock has outperformed competitor Xcel Energy (NYSE: <a class="ticker" href="/stock/xel#NYSE">XEL</a>), as well as the industry average, in that time.

Constellation Energy (NYSE: <a class="ticker" href="/stock/ceg#NYSE">CEG</a>): The company has announced an agreement to provide electricity to U.S. Postal Service locations in New York and the northeast. It also recently announced acquisitions of Houston-based StarTex Power and Connecticut-based MXenergy Holdings. Its dividend yield is 2.5% and the market cap is $7.8 billion. Shares are more than 27% higher year to date. The stock has outperformed the electric utilities industry average, as well as competitor Duke Energy (NYSE: <a class="ticker" href="/stock/duk#NYSE">DUK</a>), during that time.

El Paso Electric (NYSE: <a class="ticker" href="/stock/ee#NYSE">EE</a>): Goldman Sachs recently reiterated its Buy rating and price target due to the Texas-based company's dividend and share buybacks. The utility is expected to post year-over-year EPS growth of 19.7% on August 3. The market cap is $1.4 billion and the long-term EPS growth forecast is 6.0%. The share price is up about 20% since the beginning of the year. The stock has outperformed American Electric Power (NYSE: <a class="ticker" href="/stock/aep#NYSE">AEP</a>) and the industry average during that time.

NiSource (NYSE: <a class="ticker" href="/stock/ni#NYSE">NI</a>): The Indiana-based utility is scheduled to post second-quarter results August 2; analysts expect to see revenues up 8.0% year over year. The dividend yield is 4.4%. The P/E ratio is 17.4 and the long-term EPS growth forecast is 7.6%. The share price has grown nearly 20% since the beginning of the year. In that time, the stock has outperformed competitors Dominion Resources (NYSE: <a class="ticker" href="/stock/d#NYSE">D</a>) and Duke Energy (NYSE: <a class="ticker" href="/stock/duk#NYSE">DUK</a>), as well as the industry average.

ONEOK (NYSE: <a class="ticker" href="/stock/oke#NYSE">OKE</a>): The Tulsa, Oklahoma-based natural gas provider just boosted its quarterly dividend by about 8%; it has raised its dividend 12 times since January 2006. ONEOK also recently completed a two-for-one stock split. Its market cap is $8.1 billion, the dividend yield is 2.6% and the long-term EPS growth forecast is 7.9%. The share price is up more than 36% year to date; the stock has outperformed its industry average and competitors such as OGE Energy (NYSE: <a class="ticker" href="/stock/oge#NYSE">OGE</a>) in that time.

Portland General Electric (NYSE: <a class="ticker" href="/stock/por#NYSE">POR</a>): The Oregon utility raised the quarterly dividend 2% in May following better-than-expected first-quarter results and an increase in full-year guidance. The $1.9 billion market cap company has a dividend yield of about 4%. The P/E ratio of 11.5 is less than the industry average. The share price is more than 18% higher than at the beginning of the year. In that time, the stock has outperformed its industry average and the broader markets.

Southern Union (NYSE: <a class="ticker" href="/stock/sug#NYSE">SUG</a>): This Houston-based natural gas provider has been the subject of a bidding war over the past few weeks but will be acquired by Energy Transfer Equity (NYSE: <a class="ticker" href="/stock/ete#NYSE">ETE</a>). The merger is expected to be completed in 2012. Southern Union has a dividend yield of 1.4%. The share price is about 84% higher year to date, most of that growth coming after takeover talks began. The stock was outperforming its industry average even before that takeover bump.

Action Items:

Bullish: Traders interested in utilities exchange traded funds might want to consider the following trades:

<ul><li>PowerShares Dynamic Utilities Portfolio (NYSE: <a class="ticker" href="/stock/pui#NYSE">PUI</a>): up more than 16% in the past year</li>
<li>Rydex S&amp;P Equal Weight Utilities ETF (NYSE: <a class="ticker" href="/stock/ryu#NYSE">RYU</a>): up nearly 17% in the past year</li>
<li>First Trust Utilities AlphaDEX Fund (NYSE: <a class="ticker" href="/stock/fxu#NYSE">FXU</a>): up more than 18% in the past year</li>
<li>iShares Dow Jones U.S. Utilities Sector Index Fund (NYSE: <a class="ticker" href="/stock/idu#NYSE">IDU</a>): up nearly 13% in the past year</li></ul>

Bearish: Traders looking for contrarian options may want to consider these alternate positions:

<ul><li>Proshares UltraShort Utilities (NYSE: <a class="ticker" href="/stock/sdp#NYSE">SDP</a>)</li>
<li>Direxion Daily Energy Bear 3X Shares (NYSE: <a class="ticker" href="/stock/ery#NYSE">ERY</a>)</li></ul>

Neither Benzinga nor its staff recommend that you buy, sell, or hold any security. We do not offer investment advice, personalized or otherwise. Benzinga recommends that you conduct your own due diligence and consult a certified financial professional for personalized advice about your financial situation.

Seven Utilities Stocks Worth a Look Now

One analyst says the recent spate of acquisitions in the U.S. power sector is "just the tip of the iceberg." Bloomberg News reports that deals in the sector have jumped by more than 20-fold by value in the first eight months of the year.
Knowing that more deals like Blackstone's (NYSE: <a class="ticker" href="/stock/bx#NYSE">BX</a>) $4.7 billion purchase of Dynegy (NYSE: <a class="ticker" href="/stock/dyn#NYSE">DYN</a>) could be on the way makes it an ideal time to take a look at power and utilities ETFs that hold companies that are both targets and buyers. 
Pure-play utilities options: Utilities Select Sector SPDR (NYSE: <a class="ticker" href="/stock/xlu#NYSE">XLU</a>) and the Vanguard Utilities ETF (NYSE: <a class="ticker" href="/stock/vpu#NYSE">VPU</a>): Regulated utilities face little in the way of growth prospects and the recession has pressured their profit margins, so acquisitions are the best way for these companies to boost the bottom line. 
Look for companies like Duke Energy (NYSE: <a class="ticker" href="/stock/duk#NYSE">DUK</a>) and Exelon (NYSE: <a class="ticker" href="/stock/exc#NYSE">EXC</a>), both of which can be found in both ETFs, to be on the prowl for acquisitions. If nothing else, you'll get decent yields with both ETFs.
A global option: SPDR FTSE/Macquarie Global Infrastructure 100 ETF (NYSE: <a class="ticker" href="/stock/gii#NYSE">GII</a>): GII has a good mix of U.S.-based companies like Duke and Exelon as well as European and Asian firms.
GII is also a play on power infrastructure in addition to the actual sale and production of electricity. Plus, this ETF yields over 4%.
A quantitative play: First Trust Utilities AlphaDEX ETF (NYSE: <a class="ticker" href="/stock/fxu#NYSE">FXU</a>): FXU takes a different approach by attempting to generate positive alpha relative to traditional passive style indices through the use of the AlphaDEX screening methodology, according to the ETF's profile.
This is not a pure play on utilities, but it is basically defensive as you'll find stocks like AT&amp;T (NYSE: <a class="ticker" href="/stock/t#NYSE">T</a>) and CenturyLink (NYSE: <a class="ticker" href="/stock/ctl#NYSE">CTL</a>) among the top-10 holdings.
Another infrastructure play: First Trust NASDAQ CleanEdge Smart Grid Infrastructure Index Fund (Nasdaq: <a class="ticker" href="/stock/grid#Nasdaq">GRID</a>): If you're betting on a boom in smart grid technology, GRID is your play. As an M&amp;A play, GRID may be a bit speculative at this point, but could bear fruit down the road.
<a href="http://www.benzinga.com/tryitnow/406421">Beat the market consistently by receiving real-time trade alerts from the ETF Professor!</a>

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