Utilities have joined the other major sectors in a broad equity market decline that began in January.
The Utilities Select Sector SPDR Fund (Ticker: XLU) began selling off in February and yesterday closed below October lows at $24.55.
The $1.5 billion fund holds 35 of the country’s largest utilities includingExelon (Ticker: EXC), Southern Company (Ticker: SO) and FPL Group(Ticker: FPL). The fund’s dividend yield is approaching 5% and carries an expense ratio of 0.21%.
On top of the downtrend in the overall market, utilities have come under additional pressure as the Obama administration unveiled an ambitious regulatory plan for climate policy that promises to drive up costs for utility companies. The chief executive ofDuke Energy (Ticker: DUK), one of the nation’s biggest power companies, recently said that the President’s proposal to place a price on carbon gas emissions would drive up electricity rates in some areas of the U.S. by 40%.