This Vanguard Index Fund Is a Once-in-a-Decade Buying Opportunity for the Artificial Intelligence (AI) Boom
The Vanguard Utilities ETF (NYSEMKT: VPU) has returned 30% year to date, outstripping the 23% return in the S&P 500 (SNPINDEX: ^GSPC). The utilities sector rarely outperforms the broader market, but this year has been an exception. Investors have piled into utility stocks on the premise that artificial intelligence will boost energy consumption.
Goldman Sachs estimates U.S. electricity demand will increase at 2.4% annually through 2030. "That kind of spike in power demand hasn't been seen in the U.S. since the early years of this century," analyst commented. Importantly, the utilities sector outperformed the S&P 500 by 65 percentage points between January 2000 and December 2010, the most recent period characterized by soaring electricity demand.
That does not mean the Vanguard Utilties ETF will outperform the S&P 500 in the coming years, though that outcome is certainly plausible. Artificial intelligence should be the biggest catalyst in over a decade for electric utilities, and the index fund is an easy way to capitalize on that opportunity.
Source Fool.com
