Vanguard Utilities Index ETF: Are Utilities the New Growth Stocks?

By Reuben Gregg Brewer – Apr 10, 2026 at 10:15AM ESTKey PointsVanguard Utilities ETF provides investors with broad exposure to the utility sector.The utility sector is seeing a step change in electricity demand.Electric utilities used to be known as "widows and orphans" stocks because they were considered safe and paid large dividends. Today, however, they are increasingly looking like growth stocks due to the world's push toward electrification. While the utility sector will likely never rival the growth of the technology sector, utilities aren't the boring stocks of old, either. Here's why Vanguard Utilities ETF (VPU +0.42%) could provide you with shockingly attractive returns. What's changed in the utility sector? Regulated utilities are granted monopolies in the regions they serve. In exchange, they have to submit to material government oversight of the rates they charge and the capital investments they make. Essentially, regulators try to strike a balance between reliability, cost, and investor returns. Traditionally, that has meant slow, steady growth for utilities. Image source: Getty Images. But something has changed. Between 2000 and 2020, electricity demand grew by 9%. Not 9% a year, 9% over the entire 20-year span. Between 2020 and 2040, however, demand is projected to increase as much as 55%. That's a step change in demand driven power hungry technologies like electric vehicles and artificial intelligence. To keep up with demand, utilities will have to increase capital spending. And regulators are likely to approve of that spending along with regular rate hikes to ensure grid reliability. A lot of companies are also contracting directly with utilities for power, as well. ExpandNYSEMKT: VPUVanguard Utilities ETFToday's Change(0.42%) $0.85Current Price$204.48Key Data PointsDay's Range$203.31 - $204.5452wk Range$161.54 - $206.10Volume63K Vanguard Utilities ETF is a good way to take advantage of the change You could try picking individual utilities to play this step change in electricity demand. However, that approach is time-consuming and entails material idiosyncratic risk. Most investors will be better off simply buying a diversified ETF, such as Vanguard Utilities ETF. The expense ratio is a tiny 0.09%, and roughly 62% of the portfolio is dedicated to electric utilities. However, another 30% is spread across multi-utilities, renewable power providers, and independent power producers, all of which have an electrical component. Essentially, Vanguard Utilities ETF is a simple way to quickly get broad exposure to the utility sector. And that, in turn, allows you to participate in the rising demand for electricity. However, remember that this demand isn't a one or two-year phenomenon. It is expected to be a multi-decade trend. If you buy Vanguard Utilities ETF, go in with a long-term mindset. The exchange-traded fund's attractive 2.5% dividend yield should make it easier for you to stick around through any short-term drawdowns along the way.Read NextApr 4, 2026 •By Matt DiLalloWant $250 In Annual Passive Income While Generating 10% Annual Total Returns? Invest $10,000 Into This Vanguard ETF and Never Look Back.Apr 1, 2026 •By James BrumleyMeet the Vanguard Index Fund Beating the S&P 500 in 2026Mar 30, 2026 •By David Jagielski, CPAWorried About a Market Crash?

This Vanguard Fund Can Help Reduce Your RiskApr 10, 2026 •By Reuben Gregg BrewerDon't Get Caught Up in the Oil Rally: This High-Yield Stock Will Keep Paying Long After the Rally EndsApr 10, 2026 •By Leo SunHere's Why Plug Power Stock Is a Buy Before April 16Apr 10, 2026 •By Daniel MillerStellantis Shines in Q1, Giving Investors an Opportunity for Big Turnaround GainsAbout the AuthorReuben Gregg Brewer is a contributing Motley Fool stock market analyst covering energy, utilities, REITs, and consumer staples. He is the former director of research at Value Line Publishing, where he rose from mutual fund analyst to equity analyst before leading all research operations. Reuben holds a bachelor’s degree in psychology from SUNY Purchase, a master’s in social work from Columbia University, and an MBA from Regis University. He has been featured as a financial expert on CNBC and in the Financial Times, Barron’s, and InvestmentNews.TMFReubenGBrewerStocks MentionedVanguard Utilities ETFNYSEMKT: VPU$204.48(+0.42%)+$0.85*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.