XLU — Utilities Select Sector SPDR
SPDR (State Street) · Expense Ratio: 0.1% · Sectors · roughly average for its Sectors category
Key Facts
| Ticker | XLU |
| Full Name | Utilities Select Sector SPDR |
| Provider | SPDR (State Street) |
| Expense Ratio | 0.1% |
| Category | Sectors |
| Assets Under Management | $15B |
| Inception Year | 1998 (28 years ago) |
| Number of Holdings | 31 |
| Dividend Yield | ~2.8% (high) |
| Top Holdings | NEE, SO, DUK |
What Is XLU?
XLU, managed by SPDR (State Street), launched in 1998, is a well-established ETF with adequate liquidity for most investors in the Sectors category. Sector-specific ETF targeting a particular industry like technology, healthcare, or energy. With $15B in assets under management, it has adequate trading volume for most individual investors.
XLU in a FIRE Portfolio
This fund serves as a satellite position — adding targeted exposure to sectors within a FIRE portfolio built around a broad-market core.
Satellite holdings typically make up 5-20% of your portfolio. Sector bets amplify risk — limit any single sector to 5-10% of your portfolio. The rest should stay in broad-market core holdings.
Cost Analysis: How XLU's 0.1% Fee Affects Your FIRE Timeline
At 0.1%, XLU is moderately priced. Annual fees on a $100K investment: $100. Over 30 years, the fee drag shaves approximately 0.6% off your total returns. For a $1M FIRE portfolio, that's about $10,000 in cumulative fees — noticeable but reasonable for most investors.
Dividend Income Potential
With a high dividend yield of approximately 2.8%, here's what XLU could generate in annual income at different portfolio sizes:
| Portfolio Value | Annual Dividend Income | Monthly Income |
|---|---|---|
| $100,000 | $2,800/year | $233/month |
| $250,000 | $7,000/year | $583/month |
| $500,000 | $14,000/year | $1,167/month |
| $1,000,000 | $28,000/year | $2,333/month |
Frequently Asked Questions About XLU
What is the expense ratio for XLU?
XLU has an expense ratio of 0.1%. This is moderately priced — on a $100K portfolio, annual fees are $100. Roughly average for its sectors category.
Is XLU good for a FIRE portfolio?
This fund serves as a satellite position — adding targeted exposure to sectors within a FIRE portfolio built around a broad-market core. Its 0.1% expense ratio is moderately priced for the Sectors category.
How does the 0.1% fee affect long-term returns?
At 0.1%, you'll pay $100/year per $100K invested. Over 30 years, fees reduce total returns by approximately 0.6%. Use the embedded calculator below to model the exact impact on your specific portfolio.
Is XLU liquid enough for my portfolio?
XLU manages $15B in assets — a well-established ETF with adequate liquidity for most investors. For most individual FIRE investors making regular contributions, liquidity is sufficient. If you're investing large lump sums ($100K+), use limit orders to control your execution price.
Similar ETFs in Sectors
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- XLV — Health Care Select Sector SPDR (0.1% · Satellite Position)
- XLF — Financial Select Sector SPDR (0.1% · Satellite Position)
- XLI — Industrial Select Sector SPDR (0.1% · Satellite Position)
- XLE — Energy Select Sector SPDR (0.1% · Satellite Position)
- XLP — Consumer Staples Select Sector SPDR (0.1% · Satellite Position)
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- VGT — Vanguard Information Technology ETF (0.1% · Satellite Position)
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