Bear Market for Utilities ETF Presents Buying Opportunity as Rate Hikes Cool and Long-Term Demand Persists

VPU utilities ETF has dropped nearly 20% recently, entering bear market territory. This presents a potential buying opportunity.

Rising interest rates have pressured the utilities sector due to its reliance on debt financing. However, rate hikes may be peaking.

Negative guidance from a couple major holdings like NEE and NEP has disproportionately impacted VPU. But broader fundamentals remain positive.

VPU offers diversity across large, stable utility companies. Interest rate sensitivity is balanced by demand for electricity and investment in the sector.

With valuations depressed, now could be a good time to take a contrarian view and accumulate shares of VPU or utilities stocks.