Institutional Investors: How They Played S&P 500 Utilities in Q1



Institutional activity in XLU

Utility stocks—generally called widow and orphan stocks—are one of the poorest performing sectors across the broader markets so far this year. They might continue to trade weakly, given the aggressive stance of the Fed. Along with a strong possibility of another quarter-point rate hike in June, traders are predicting three more rate hikes during the year. With the outlook for utilities not so exciting, we’ll see how institutional investors have recently played out their utilities (IDU) (VPU) holdings.

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How they played out XLU in Q1

According to a recent 13F filing, Goldman Sachs is the largest institutional investor in the Utilities Select Sector SPDR ETF (XLU) with close to 11.5% of its outstanding shares as of March 31. It added net 5.3 million shares and raised the total number of shares to more than 16 million during the quarter. In the fourth quarter, it held 10.8% stake in XLU.

Citi Investment Research is the second-largest investor in XLU with more than 10% of its total outstanding shares. It added net 4 million shares of XLU in the first quarter.

It’s worth noting that utilities peaked in late 2017, and tax reforms, an interest rate hike, and valuation concerns pulled them down in the first quarter. XLU posted a 52-week low in February.

The Utilities Select Sector SPDR ETF (XLU), which tracks the S&P 500 Utilities Index, has fallen more than 5%, while the broader markets have risen 3% year-to-date.


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