What is an ETF and how do these utility sector funds work?

An exchange-traded fund (ETF) is a basket of securities that trades on an exchange like a stock. Both FUTY and XLU invest in utility companies such as NextEra Energy and Southern Company. They provide diversified exposure to the sector without needing to buy each stock individually. Investors gain access to the performance of the underlying assets, and distributions are typically passed through as dividends. These funds are designed to track utility sector indices, though specific benchmark details are currently not available for public verification.

Why does the expense ratio matter when comparing FUTY and XLU?

The expense ratio is the annual fee charged to manage an ETF, deducted directly from fund assets. FUTY has an expense ratio of 0.08%, and XLU also has an expense ratio of 0.08%. Since these fees are identical, the immediate cost difference is zero percentage points. Lower fees generally mean higher net returns over long periods. However, a small difference in basis points can compound significantly over decades. Investors should always check these costs, as they represent a guaranteed drag on performance regardless of market movements.

How similar are the top holdings in FUTY and XLU?

The top ten holdings for both funds are identical in composition, including NextEra Energy, Southern Company, Duke Energy, Constellation Energy, and American Electric Power. However, the specific weights differ. For example, NextEra Energy constitutes 11.72% of FUTY assets compared to 12.97% for XLU. Similarly, Constellation Energy is 5.67% in FUTY versus 6.49% in XLU. These slight variances in allocation may lead to minor differences in tracking performance, despite the shared underlying securities list and overall similar sector focus.

Which fund offers a higher dividend yield for income seekers?

Based on the provided data, XLU currently offers a dividend yield of 2.99%, which is slightly higher than FUTY's yield of 2.91%. Utility sector ETFs are often favoured for income generation due to stable company payouts. However, a higher yield does not automatically mean a better investment, as it can reflect price changes or differing distribution policies. Investors should consider that yields fluctuate with market prices and that both funds distribute dividends to provide income alongside potential capital appreciation in the utilities sector.

How does fund size impact liquidity for FUTY and XLU?

Net assets significantly influence a fund's liquidity. XLU manages $21.1 billion in net assets, making it the established leader in this category. In contrast, FUTY has $2.3 billion in net assets. A larger asset base often correlates with higher trading volumes and tighter bid-ask spreads, potentially reducing transaction costs for active traders. While FUTY's size is reasonable, the substantial difference in assets under management suggests XLU may offer greater ease of entry and exit, particularly during periods of high market volatility or uncertainty.

What should investors know about index tracking transparency?

Both FUTY and XLU have 'not available' listed for the specific index tracked in the provided dataset. This lack of transparency prevents investors from verifying the exact benchmark methodology or comparing index constituents in detail. While FUTY tracks the Fidelity MSCI Utilities Index and XLU tracks the Utilities Select Sector Index, the specific weighting rules are not currently verifiable through the available data. Investors should be aware that without clear index details, assessing concentration risks or specific sub-sector exposure becomes more challenging.

Does the inception date affect long-term performance comparison?

XLU was launched on December 16, 1998, providing a long operating history in the utilities sector. FUTY has a more recent inception date of October 21, 2013. While older funds like XLU have more historical performance data, the inception date itself does not dictate future returns. The difference in age primarily reflects the availability of back-testing data and the fund's survival through various market cycles. Newer funds may employ modern indexing strategies, but both aim to replicate utility sector performance based on their respective methodologies.

Are sector weights provided for these utility ETFs?

Sector weights for both FUTY and XLU are listed as 'not available' in the current data set. This limits the ability to analyse detailed exposure to specific sub-sectors within the utilities category, such as regulated electric, gas, or water utilities. Without these details, investors cannot fully assess concentration risk or how each fund diversifies within the broader utilities sector. Transparency regarding sector weights is crucial for precise portfolio construction, and its absence hinders comprehensive comparative analysis between these two utility-focused ETFs.

What is the role of an ETF issuer in fund management?

The issuer creates and manages the ETF structure. FUTY is issued by Fidelity, while XLU is issued by SPDR. The issuer is responsible for the fund's operational efficiency, tracking accuracy, and maintaining liquidity. Reputable issuers often ensure that the fund closely follows its intended benchmark, although specific benchmark details are not available here. The choice of issuer can impact investor confidence, particularly when considering fund stability and the likelihood of the fund surviving market downturns, given the long history of SPDR and the scale of Fidelity's asset management.

Disclaimer: What should readers understand about this information?

This FAQ page is for educational purposes only and does not constitute financial advice, recommendations, or solicitation to buy or sell any securities. The data provided is based on figures from Yahoo Finance fetched on September 22, 2026. Financial markets are dynamic, and information such as expense ratios, dividend yields, net assets, and top holdings can change frequently. Readers should conduct their own due diligence and consult with a qualified financial professional before making investment decisions. Specific index details and sector weights are not available in the provided data.

FUTY vs XLU

Two funds, one decision: we compare cost, performance and what each ETF actually holds in September 2026.

Fidelity MSCI Utilities ETF (FUTY) vs Utilities Select Sector SPDR (XLU). Compare expense ratios, top holdings, dividend yields and market tracking for these utility sector funds. Educational content, not financial advice.

Fidelity MSCI Utilities ETF (FUTY) vs Utilities Select Sector SPDR (XLU). Compare expense ratios, top holdings, dividend yields and market tracking for these utility sector funds. Educational content,...

Fund Snapshot

Key Fund Metrics

FUTY

Metric

XLU

0.08%

Expense Ratio

0.08%

2.91%

Dividend Yield

2.99%

$2.25B

Net Assets

$21.15B

68

Holdings

34

Oct 21, 2013

Inception Date

Dec 16, 1998

–

Index Tracked

–

Utilities

Fund Category

Utilities

Both funds charge the same annual fee.

Shared Top Holdings

Holding	FUTY	XLU
NEENextEra Energy, Inc.	11.72%	12.97%
SOThe Southern Company	6.76%	7.60%
DUKDuke Energy Corporation	6.39%	7.08%
CEGConstellation Energy Corporation	5.67%	6.49%
AEPAmerican Electric Power Company, Inc.	4.57%	5.05%
DDominion Energy, Inc.	3.91%	4.32%
SRESempra	3.71%	4.11%
VSTVistra Corp.	3.34%	3.42%
ETREntergy Corporation	3.33%	3.68%
XELXcel Energy Inc.	3.18%	3.49%

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VPU vs XLU

VPU vs XLU: two US utility ETFs with the same top 10 holdings. VPU holds 75 stocks for 0.09% a year, XLU holds 34 for 0.08%. Compare fees, yield and size.

Investment Analysis

FUTY

Pros

Fidelity MSCI Utilities ETF offers competitive exposure to the utilities sector with a low 0.08% expense ratio.
The fund has accumulated $2.3 billion in net assets, indicating reasonable investor adoption.
It delivers a 2.91% dividend yield, providing attractive income for utility sector investors.

Considerations

Its smaller asset base compared to the market leader may limit liquidity during volatile market conditions.
The index tracked is not available, which prevents verification of its specific benchmark methodology.
The fund's sector weights are not available, making it harder to assess concentration risks.

XLU

Pros

The Utilities Select Sector SPDR is the established leader in the category with $21.1 billion in net assets.
It matches its competitor's low 0.08% expense ratio while offering a slightly higher 2.99% dividend yield.
With an inception date in 1998, it has a long operating history in the utilities sector.

Considerations

The fund tracks a different index from its competitor, the specifics of which are not available.
Sector weights are not available, limiting transparency for investors analysing utility sub-sector exposure.
Despite its size, the lack of published index details hinders comprehensive comparative analysis.

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About FUTY and XLU

FUTY (FUTY)

Fidelity MSCI Utilities ETF (FUTY) is an exchange-traded fund designed to provide investors with exposure to large- and mid-cap companies in the utilities sector by tracking an MSCI utilities index. It offers a single-ticket way to gain diversified exposure to electricity, gas, water and multi-utility companies rather than owning individual stocks. Investors should note it is an equity-sector ETF, so performance typically correlates with utilities industry cycles, interest-rate moves and regulatory developments. The fund may pay dividends derived from underlying holdings, but yields and distributions can vary. Costs such as the expense ratio and trading spreads affect returns — check the fund’s prospectus for up-to-date fees. Liquidity and tracking error are additional considerations: ETFs trade like stocks and can deviate from their benchmark in the short term. This summary is for general education only and not investment advice; investors should consider their goals, risk tolerance and consult a financial professional if needed.

XLU (XLU)

Utilities Select Sector SPDR (XLU) is an exchange-traded fund that tracks the S&P 500 utilities sector, giving investors concentrated exposure to large US utility companies. It is commonly used for income and defensive sector exposure because many utilities pay dividends and operate in regulated markets with steady demand. Investors should know XLU’s returns come from share-price moves and dividend payments; dividends are not guaranteed and can vary. The fund can be sensitive to interest-rate moves, regulatory changes and commodity costs, and it lacks broad sector diversification. Fees, yield, holdings and liquidity can change, so check the latest factsheet before investing. This summary is educational only and not personalised advice. Consider how a utilities allocation would fit your overall portfolio, risk tolerance and investment horizon, and consult a qualified adviser for tailored guidance.

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FUTY vs XLU

Fund Snapshot