It’s been about 9-months since we last shared a video post. We’ve had an influx of new subscribers, so we thought perhaps reviewing how we put our Tailwind % analysis and QuickView charts to work would be useful. Let us know if you think incorporating videos into our content mix moving forward is a good idea. Having worked in the radio business in the first few decades of my career, me and my face for it might better serve you from behind the keyboard only.
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Global Asset Class ETFs
We cover these asset classes in today’s video.
⚡ PREMIUM ETF PICK FXU: First Trust Utilities AlphaDEX Fund Overview (No Paywall Today)
The First Trust Utilities AlphaDEX Fund (FXU) is an exchange-traded fund (ETF) that tracks the StrataQuant® Utilities Index, employing a quantitative methodology to select and weight U.S. utility stocks based on growth and value factors. This approach results in a diversified portfolio emphasizing mid-cap companies within the utilities sector.
Key Metrics (as of April 2025):
Assets Under Management (AUM): Approximately $1.37 billion
Expense Ratio: 0.64%
Dividend Yield: 2.34%
1-Year Return: +28.34%
Top Holdings: Includes companies like Waste Management (WM), PG&E Corporation (PCG), Evergy (EVRG), NRG Energy (NRG), and Edison International (EIX) StockAnalysis+1ETF Database+1
FXU's strategy offers investors exposure to a broad range of utility companies, balancing traditional electric utilities with firms involved in renewable energy and infrastructure services.
🔥 Utilities Sector Catalysts – April 2025
The utilities sector is currently influenced by several significant factors:
1. Surging Electricity Demand
The proliferation of AI-driven data centers and the expansion of electric vehicle (EV) infrastructure have led to unprecedented electricity demand. This surge is prompting utilities to accelerate capital expenditures to enhance grid capacity and reliability. Notably, companies like Evergy have increased their five-year investment plans substantially to address this demand.
2. Record-High Capital Expenditures
U.S. utilities are projected to invest over $1 trillion from 2025 through 2029 in infrastructure upgrades, including the development of new natural gas, nuclear, solar, and wind power facilities. These investments aim to modernize aging systems and integrate advanced technologies like smart grids and battery storage
3. Policy and Regulatory Landscape
The current administration's policies, including tariffs and regulatory adjustments, are impacting the energy sector. While some initiatives aim to boost domestic energy production, others introduce uncertainties, particularly concerning renewable energy incentives and infrastructure projects
4. Mergers and Acquisitions Activity
The utilities sector is experiencing a surge in mergers and acquisitions, driven by the attractiveness of power generation assets amid rising demand. Significant deals, such as Constellation Energy's acquisition of Calpine, highlight the sector's consolidation trend .
5. Renewable Energy Integration Challenges
Europe's recent increase in emissions due to reduced clean energy output underscores the challenges of integrating renewable sources reliably. This situation emphasizes the need for utilities to balance renewable integration with dependable energy supply
📝 Bottom Line for Investors
FXU offers a strategic avenue for investors seeking exposure to the utilities sector, which is currently navigating a complex landscape of rising demand, substantial infrastructure investments, and evolving regulatory frameworks. The fund's diversified holdings position it to potentially benefit from these sector dynamics.
StockCheatSheets is best utilized as a risk-management tool that can help traders confirm their own investing theses or trading ideas. None of what we offer should be construed as advice related to buying and selling securities. The User Guide offers a deep dive into interpreting our data, but it’s a starting point for your own research.
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