While this year has been another great one for the markets, investors may undoubtedly be looking for ways to keep their portfolios safe, opting for investments that have minimal or no exposure to artificial intelligence (AI). With valuations being as high as they are, particularly in the tech sector, it can be a critical time to seek out safety.
The iShares S&P/TSX Capped Utilities Index ETF (TSX:XUT) can be an appealing option for this type of purpose, as it focuses on Canadian utility companies. While utility stocks can still decline if there's a downturn in the markets, they generally make for safe and stable long-term investments. And within the iShares Utilities ETF, investors gain exposure to leading Canadian utility companies, including Fortis, Brookfield Infrastructure Partners, Emera, and many others.
With many of those stocks offering solid yields, the fund also can be an excellent source of recurring income for investors. Currently, it pays around 3.3%, which is a fairly high rate, especially at a time when stock prices are high and yields are lower than usual.
Although this isn't a highly diverse fund and there are just 13 holdings, it can make for a great investment to put inside of a tax-free savings account (TFSA), acting as a pillar that can offer some valuable safety and recurring dividend income. This year, the ETF has risen by around 8%, and when including dividends, its total return rises to approximately 11%. And over the past five years, its total returns are up to 40%.
While it may not be a high-powered growth fund, it can make for a solid long-term investment to put into a TFSA for the long haul.
