Vanguard Utilities ETF (VPU): Complete Beginner's Guide
Vanguard Utilities ETF (VPU) is a utilities ETF from Vanguard with an expense ratio of 0.10% and $6.0B in assets under management. Our Beginner Suitability Score: 9/10 (Great for Beginners). 5-year annualized return: 6.00%.
Last updated: April 2026
Vanguard • Utilities
Expense Ratio
0.10%
AUM
$6.0B
Dividend Yield
2.90%
Inception
2004
Beginner Score
9/10
What is Vanguard Utilities ETF?
VPU invests in U.S. utility companies that provide essential services like electricity, natural gas, and water to homes and businesses. Utilities are considered one of the most defensive sectors because people always need power and water regardless of the economy. This fund is popular with income-focused investors thanks to its above-average dividend yield and low volatility.
VPU is managed by Vanguard and has been available since 2004. With $6.0B in assets under management, it's a growing fund that has attracted significant investor interest. The fund charges an expense ratio of 0.10%, which means for every $10,000 you invest, you pay approximately $10 per year in management fees.
VPU at a Glance — Key Metrics
| Expense Ratio | 0.10% |
| Total Holdings | 68 |
| P/E Ratio | 19.5 |
| Beta | 0.58 |
| Dividend Yield | 2.90% |
| AUM | $6.0B |
| Inception Year | 2004 |
| Issuer | Vanguard |
Top 10 Holdings in VPU
VPU holds 68 different securities. Here are the largest positions that make up the core of this fund:
| # | Company | Ticker | Weight |
|---|---|---|---|
| 1 | NextEra Energy Inc. | NEE | 14.00% |
| 2 | Southern Co. | SO | 8.00% |
| 3 | Duke Energy Corp. | DUK | 7.00% |
| 4 | Sempra Energy | SRE | 5.00% |
| 5 | Dominion Energy | D | 4.50% |
| 6 | American Electric Power | AEP | 4.00% |
| 7 | Exelon Corp. | EXC | 3.50% |
| 8 | Xcel Energy | XEL | 3.00% |
| 9 | WEC Energy Group | WEC | 2.80% |
| 10 | Consolidated Edison | ED | 2.50% |
VPU's top holding is NextEra Energy Inc. (NEE) at 14.00%, followed by Southern Co. (SO) at 8.00% and Duke Energy Corp. (DUK) at 7.00%. The top 10 holdings account for 54.30% of the fund's 68 total positions.
View data table
| Rank | Company | Ticker | Weight |
|---|---|---|---|
| 1 | NextEra Energy Inc. | NEE | 14.00% |
| 2 | Southern Co. | SO | 8.00% |
| 3 | Duke Energy Corp. | DUK | 7.00% |
| 4 | Sempra Energy | SRE | 5.00% |
| 5 | Dominion Energy | D | 4.50% |
| 6 | American Electric Power | AEP | 4.00% |
| 7 | Exelon Corp. | EXC | 3.50% |
| 8 | Xcel Energy | XEL | 3.00% |
| 9 | WEC Energy Group | WEC | 2.80% |
| 10 | Consolidated Edison | ED | 2.50% |
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VPU Performance History
Here's how VPU has performed over different time periods. Remember that past performance doesn't guarantee future results, but it gives you a sense of the fund's track record:
YTD
1.50%
1 Year
12.00%
3 Year
4.00%
5 Year
6.00%
10 Year
8.00%
VPU has returned 6.00% annualized over 5 years and 8.00% over 10 years. YTD return is 1.50%.
View data table
| Period | Return |
|---|---|
| YTD | 1.50% |
| 1 Year | 12.00% |
| 3 Year | 4.00% |
| 5 Year | 6.00% |
| 10 Year | 8.00% |
Beginner Suitability Score: 9/10
Our proprietary Beginner Suitability Score evaluates ETFs based on five factors that matter most to new investors: fees, volatility, diversification, dividend history, and track record length.
VPU scores 9/10 because it has very low fees, shows lower-than-average volatility, focuses on 68 selected holdings, and has been available since 2004, giving it a proven track record.
How to Buy VPU — Step by Step
- Open a brokerage account — We recommend Fidelity, Charles Schwab, or Vanguard for ETF investing. All offer $0 commissions on ETF trades.
- Fund your account — Transfer money from your bank. You can start with as little as $1 if your broker offers fractional shares.
- Search for "VPU" — Use the search bar in your brokerage platform to find Vanguard Utilities ETF.
- Place your order — Choose "Market Order" for simplicity or "Limit Order" if you want to set a specific price. Enter how many shares (or dollar amount) you want to buy.
- Set up automatic investing — Most brokers let you schedule recurring purchases (e.g., $100/month on the 1st). This is dollar cost averaging in action.
VPU Sector Allocation
Here's how VPU distributes its investments across different sectors of the economy:
VPU's largest sector allocation is Utilities at 93.0%, followed by Industrials at 1.8% and Energy at 1.2%.
View data table
| Sector | Weight |
|---|---|
| Utilities | 93.0% |
| Industrials | 1.8% |
| Energy | 1.2% |
| Real Estate | 1.0% |
| Financials | 0.9% |
| Technology | 0.8% |
| Materials | 0.7% |
| Communication Services | 0.6% |
Dollar Cost Averaging Into VPU
Here's what consistent monthly investing could look like over time, assuming an average annual return of 8% (approximate historical stock market average):
| Monthly | 10 Years | 20 Years | 30 Years |
|---|---|---|---|
| $100/mo | $18,417 | $59,295 | $150,030 |
| $250/mo | $46,041 | $148,237 | $375,074 |
| $500/mo | $92,083 | $296,474 | $750,148 |
*Projections assume 8% average annual return with monthly compounding. Actual returns will vary. Past performance doesn't guarantee future results.
Fee impact: With VPU's expense ratio of 0.10%, a $10,000 investment would lose approximately $856 to fees over 20 years compared to a zero-fee investment. This is a reasonable fee level for the value provided.
VPU's expense ratio of 0.10% costs $856 on a $10,000 investment over 20 years (assuming 8% annual return). Without fees, the investment would grow to $46,610 instead of $45,754.
View data table
| Year | Without Fees | With Fees | Fee Cost |
|---|---|---|---|
| 0 | $10,000 | $10,000 | $0 |
| 5 | $14,693 | $14,625 | $68 |
| 10 | $21,589 | $21,390 | $199 |
| 15 | $31,722 | $31,284 | $438 |
| 20 | $46,610 | $45,754 | $856 |
Pros and Cons of VPU
Pros
- ✓Lowest beta among Vanguard sector ETFs provides genuine downside protection
- ✓Above-average dividend yield from regulated utilities with predictable cash flows
- ✓Essential services ensure stable revenue even during deep economic recessions
- ✓Growing demand for electricity from data centers and electric vehicles benefits the sector
Cons
- ✗Significantly underperforms during strong bull markets when growth stocks lead
- ✗Rising interest rates make utility dividends less attractive compared to bonds
- ✗Heavy capital expenditure requirements for grid modernization can pressure profits
Frequently Asked Questions
Is VPU a good ETF for beginners?▾
VPU has a Beginner Suitability Score of 9/10 on our scale. This makes it a strong choice for new investors due to its low fees and focused strategy.
What is the expense ratio of VPU?▾
VPU has an expense ratio of 0.10%. This means for every $10,000 you invest, you pay approximately $10 per year in fees. This is considered very low and cost-efficient.
How much money do I need to invest in VPU?▾
You can invest in VPU with as little as $1 through brokers that offer fractional shares (like Fidelity, Schwab, or Robinhood). There is no minimum investment required beyond the share price itself, which changes daily. Dollar cost averaging — investing a fixed amount regularly — is a popular strategy.
Does VPU pay dividends?▾
Yes, VPU pays dividends with a current yield of approximately 2.90%. Dividends are typically paid quarterly and can be reinvested automatically through most brokers.
What are the top holdings in VPU?▾
The top holdings in VPU include NextEra Energy Inc. (14.00%), Southern Co. (8.00%), Duke Energy Corp. (7.00%), and more. The fund holds 68 total positions, providing focused exposure to selected companies.
What sectors does VPU invest in?▾
VPU's largest sector allocations are Utilities (93.00%), Industrials (1.80%), Energy (1.20%). This sector distribution shows a focus on utilities stocks.
How much do VPU's fees cost over time?▾
With an expense ratio of 0.10%, a $10,000 investment in VPU would lose approximately $856 to fees over 20 years (assuming 8% annual returns). This is a reasonable fee level.