Electricity Demand Projections Shift Utility Stocks From Income To Growth
EM
Ellis Montgomery
index fund expense ratio · Apr 10, 2026
Source: The Digital Ledger Data Terminal
Investors can participate in the rising demand for electricity through the Vanguard Utilities ETF (VPU). The fund's 0.09% expense ratio and 2.5% dividend yield provide a broad entry point into a sector currently undergoing a step change in demand. Between 2000 and 2020, electricity demand grew by 9% over the entire 20-year span. Projections now indicate demand will increase as much as 55% between 2020 and 2040.
This growth is driven by the world's push toward electrification and power-hungry technologies like artificial intelligence and electric vehicles. To maintain grid reliability, utilities must increase capital spending. Regulators, who grant utilities monopolies in the regions they serve, are likely to approve this spending and accompanying rate hikes.
VPU allocates 62% of its portfolio to electric utilities and 30% to multi-utilities, renewable power providers, and independent power producers with an electrical component.
index fund expense ratioVanguard
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