19 Feb

How Institutional Investors Played XLU in Q4

WRITTEN BY Vineet Kulkarni

Institutional activity in XLU

Let’s take a look at how institutional investors played out XLU in the fourth quarter. At the end of the fourth quarter, Goldman Sachs was the top institutional investor in the Utilities Select Sector SPDR ETF (XLU). Goldman Sachs added net ~4 million units of XLU during the fourth quarter and held a 12.2% stake as of December 31. Goldman Sachs sold ~17 million units and held a 10.8% stake in XLU in the third quarter.

How Institutional Investors Played XLU in Q4

Why utilities?

Utilities got a boost after geopolitical issues pushed broader markets down and investors turned to safe havens in the fourth quarter. However, markets and utilities exhibited a severe fall later in December.

Currently, utilities (IDU) (VPU) are one of the top-yielding sectors among broader markets. Utilities offer a dividend yield of 3.3%, which is higher than broader markets.

Major activities

According to a recent 13F filing, Morgan Stanley bought net 1.3 million units of XLU and raised its total stake to ~8.4% as of December 31. In the third quarter, Morgan Stanley bought net 8.9 million units of XLU. Citi Investment Research was the fourth-largest institutional investor in XLU at the end of the third quarter. Citi Investment Research sold net 5.5 million units and held 3.2% at the end of the fourth quarter.

Deutsche Asset Management Americas added 6.4 million units of XLU during the fourth quarter and held a 4.1% stake as of December 31.

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