iShares US Utilities ETF

IDU

Market cap $1.48B

As AI fatigue rattles markets with sell-offs hitting trucking, logistics and real estate services, rotating into defensive ETFs becomes attractive.

From "software-mageddon" to rising AI capex pressuring Big Tech, diversification via defensive and global ETFs gains focus.

Designed to provide broad exposure to the Utilities - Broad segment of the equity market, the iShares U.S. Utilities ETF (IDU) is a passively managed exchange traded fund launched on June 12, 2000.

A third Fed rate cut this year is boosting utilities, making diversified Utility ETFs like XLU an attractive way to tap lower borrowing costs and steady dividends.

Water utilities are undervalued by 18% versus 11-year averages, while electricity/multi-utilities and gas utilities are slightly overvalued. iShares U.S. Utilities ETF offers similar long-term risk/return as XLU, despite higher fees and broader sector exposure. XLU is preferable for trading and tactical allocation due to higher liquidity, while RSPU offers more balanced company exposure.

Utility ETFs like XLU gain momentum as AI-driven data center power demand and falling rate expectations boost the sector's appeal.

The iShares U.S. Utilities ETF (IDU) was launched on June 12, 2000, and is a passively managed exchange traded fund designed to offer broad exposure to the Utilities - Broad segment of the equity market.

Utility ETFs, like XLU and VPU, are set to shine as the Fed's latest rate cut and AI-driven power demand create a powerful tailwind for the sector.

iShares U.S. Utilities ETF offers diversified exposure to U.S. utilities, including electricity, gas, water, and waste management companies. IDU has been a reliable, defensive investment, particularly during periods of concern over broader equity valuations. The ETF delivered strong results in early 2025, validating a previous 'buy' recommendation despite the S&P 500's robust performance.

As AI-fueled gains spark bubble warnings, investors are eyeing defensive ETFs in consumer staples, utilities and healthcare for safety.