iShares US Utilities ETF

IDU

Market cap $1.52B

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.

The artificial intelligence sector is showing critical warning signs that suggest a significant correction may be approaching. Recent market analysis reveals that AI stocks, particularly the “Magnificent Seven,” have been making lower highs since December 2024, diverging from broader market performance – a pattern that historically precedes major corrections.

AI's energy-hungry data centers are fueling a surge in utility ETFs, with funds like XLU, VPU, IDU, and FUTY outpacing sector growth.