The utilities sector comprises companies that provide electricity, natural gas, water, and wastewater services to different customers, including residential, commercial, industrial, and government. Notably, the global utilities market is expected to hit almost $6 trillion by 2025, growing at a CAGR of 7% during the forecasting period, the Research and Markets report.
The utilities sector tends to provide stable returns during different business cycles due to inelastic demand for its services. This can be evidenced by the Utilities Select Sector SPDR ETF (XLU) 6.35% returns since the beginning of the year, compared to the SPDR S&P 500 Trust ETF (SPY) 13.07% decrease over the same period.
