XLU - Utilities Select Sector SPDR Fund

Utilities are part of the 'boring' portfolio recommendation — big, dull, profitable companies that perform well in downturns and pay dividends.

Utilities perform poorly during high inflation environments. Felix explicitly lists utilities as losers in the current environment.

XLU is up nearly 20% YTD and outperforming SPX. Utilities are boring, recession-resistant businesses with pricing power and dividends. They benefit from AI power demand (data centers need electricity) without taking AI risk. Nick has been recommending this for a long time.

Felix thinks utilities are overdone as a safe haven. They can't raise prices without government approval, making them suffer when inflation rises. He explicitly says 'not so much' for utilities.

Utilities are defensive; ETF holds stable companies. Suggested as part of a conservative allocation during uncertainty.

Utilities pay dividends, are domestic/defensive, and historically hold up during market crashes. In 2022 when S&P dropped 15%, utilities were flat. Felix describes them as the 'boring' sector that outperforms during market bleeds.

Utilities are resilient in economic downturns — people can't go without electricity and water. Up big this year. Classic defensive holding during stagflation.

The host states he is rotating into utilities and staples, noting that utility stocks have been 'pumping' over the last week. He views this as a defensive rotation during times of uncertainty.

Utilities benefit from rising energy demands from AI data centers and tend to perform well in inflationary environments

Felix explicitly states that defensive sectors like utilities and consumer staples underperform during the broad Phase 3 recovery, and investors should consider getting out of those after the recovery is underway.