May 2021

S&P 500 Breakdown: Utility Sector

The utility sector of the S&P 500 is what one might say is an example of “punching above your weight.” It’s a small piece of the S&P puzzle, but it has a tremendous impact.   

The utility sector is going to include things like gas, electric, water, and renewable energy. At 2.8% of the total S&P 500, it’s a very small piece of what’s going on, like a few other sectors. 

However, it’s a very attractive piece of the S&P 500 because of its dividend yield and consistency. When we look at companies like American Electric, Duke Energy, and more, they have the ability to pay us back a dividend.  

As we move into retirement planning with clients, we start looking at the utility sector, even though it’s only 2.8% of the S&P 500. Because of its consistency and the yield it can create, it’s likely going to offer us back income.  

For our younger investors, this may not be the case right away. But as you move into retirement, you’re looking for consistent, solid, reliable income. A consistent market return is what can help pay the bills, not the latest and greatest craze in the markets that might be here today and gone tomorrow.  

If you’d like to explore the right investments for your portfolio to better match your financial objectives, call Hoffman Financial Group today for a complimentary portfolio review!  

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