iQ Utilities & Telecom Model
INVESTMENT OBJECTIVE
Seeks capital appreciation by selecting companies deriving a majority of their revenues from their utility or telecommunication services operations.
The Utilities sector includes companies that engage in the production and delivery of electric power, natural gas, water, and other utility services, such as steam and cooled air. The Telecommunication sector is made up of companies that make communication possible on a global scale, whether it is through the phone or the Internet, through airwaves or cables, through wires or wirelessly.
RULES-BASED SELECTION PROCESS
The iQ Utilities & Telecom Model employs the following unemotional rules-based process:
Start with the largest 100 domestically-traded companies from the Utilities sector
Select the 30 companies with the highest Price Momentum.
Screen by Operating Earnings Yield and select the top 10.
This model reconstitutes every February, May, August and November
Why invest in Utilities stocks?
Investing in utilities stocks can provide several potential benefits, including:
1. Steady income: Utilities companies are often known for their consistent and reliable dividend payments, making them an attractive option for income-seeking investors. Many utilities companies operate in regulated environments, which can provide some stability for their earnings and dividends.
2. Defensive characteristics: Utilities companies tend to be less cyclical than other sectors, as demand for their services tends to be relatively stable. This can make utilities stocks an attractive option for investors looking for defensive characteristics.
3. Infrastructure investment: Utilities companies often invest in infrastructure, including power plants, pipelines, and transmission lines. As governments around the world continue to focus on infrastructure spending, utilities companies may benefit from increased investment in their networks.
It's important to note that investing in utilities stocks also comes with potential risks, including the impact of interest rate changes on the industry and the potential for regulatory and legal challenges.
Please note that investing in utilities stocks involves inherent risks, and the value of these investments may fluctuate, leading to potential loss of principal. Past performance of utilities stocks is not indicative of future results. Investors should be aware that utility companies may be influenced by various factors, such as changes in interest rates, energy prices, and government regulations. Additionally, economic conditions and market trends may impact the performance of utilities stocks.