Vanguard Utilities ETF

VPU

Market cap $8.74B

If you're interested in broad exposure to the Utilities - Broad segment of the equity market, look no further than the Vanguard Utilities Index Fund ETF Shares (VPU), a passively managed exchange traded fund launched on January 26, 2004.

Electricity is becoming a stronger economic growth engine, powering AI data centres, EVs, heat pumps and industrial decarbonisation. But grids aren't keeping up.

The AI data-center power crunch has turned utilities from bond proxies into growth stocks, and two funds sit at the center of that trade: the Utilities Select Sector SPDR Fund (NYSEARCA:XLU) and the Vanguard Utilities Index Fund ETF (NYSEARCA:VPU).

Vanguard Utilities Index Fund ETF is positioned to capitalize on surging U.S. electricity demand driven by data centers, electrification, and commercial growth. VPU offers broad utilities sector exposure, a low 0.09% expense ratio, and trades at a forward PE of 17x, below the S&P 500's 21x. Top VPU holdings like NEE, SO, and DUK project robust 5%–9% annual EPS growth and aggressive capital investments through 2030.

US electricity demand grew roughly flat for a decade. That ended once hyperscalers began signing twenty-year power purchase agreements to feed AI training clusters.

The Vanguard Energy ETF has outperformed the S&P 500 over the past five years thanks to higher oil prices. Meanwhile, the Vanguard Utilities ETF has underperformed the S&P 500 over the same period of time.

America's electricity is undeniably in a state of rapid evolution. Demand is growing, capital is moving, and independent power producers (IPPs) are responding to supply signals which competitive power markets are designed to encourage.

Japan's power industry welcomed the government's roadmap for the future replacement of nuclear reactors as a ​key step towards securing the workforce and ‌supply chains needed to sustain the sector, but its top lobbyist on Friday called for greater policy support to encourage ​investment.

The Vanguard Utilities ETF is a conservative play on the AI boom. Led by AI demand, commercial electricity consumption is soaring.

Several ​large data centers and crypto facilities planning to connect to the Texas power grid ahead of ‌peak summer demand have failed key reliability tests, raising the risk of power outages just as electricity use hits its seasonal high, according to the state grid operator.