Vanguard Utilities ETF

VPU

Market cap $8.76B

Vanguard Utilities ETF provides investors with broad exposure to the utility sector. The utility sector is seeing a step change in electricity demand.

While the Trump tariff policies have given an unprecedented boost to US business and manufacturing in particular, there are both geopolitical and domestic question marks that can rock the markets in the near future, which retirees may find unpalatable.

The Vanguard Utilities ETF offers a higher dividend yield. The fund has delivered a 10% annualized total return since its inception.

Retirement portfolios face a specific set of demands: income that arrives reliably, capital that holds its value through market downturns, and costs low enough that compounding works in the investor's favor rather than against it.

Since the Federal Reserve began raising interest rates in 2022, there have been growing concerns that the economy would eventually tip into a recession. Investors can't time the market, but they can prepare their portfolios for a recession.

The S&P 500 is down 7% year-to-date. VPU is up 7% over the same stretch.

The market environment is changing in a way that's forcing investors to reweigh risk and reward. Near-term strength isn't necessarily guaranteed to last long enough to bother stepping into these funds right now.

The exchange-traded fund invests in utility stocks, which can be among the safest investments to hold. Normally, the fund isn't all that popular, but investors have been loading up on it amid uncertainty this year.

High-yield savings accounts looked like the obvious choice two years ago, when the Fed funds rate sat above 5% and online banks were handing out 5% APY with no strings attached.

What we're looking at may be the most paradoxical environment in decades.