PSCU vs VPU

PSCUCInvesco S&P SmallCap Utilities & Communication Services ETF

VPUBVanguard Utilities ETF

In short

PSCU Most utilities ETFs are a parking lot for mega-cap power giants. PSCU goes small instead: an index of roughly 40 small-cap US utility and communication-services companies, at a below-median fee.

VPU Utilities, the whole sector, not just the S&P 500 slice. VPU tracks an index that reaches past the megacap names into mid and small utilities, about 70 in all, for 0.09% a year. Vanguard has run it since 2004.

Stated mandate

PSCU The fund tracks an index measuring the performance of securities from US utility companies and communication-services companies.

VPU The fund seeks to track the MSCI US Investable Market Utilities 25/50 Index through a primarily full-replication, passively managed strategy.

Why people hold it

• PSCU Charges 0.29% a year, under the 0.37% median for broad utilities funds.
• Rare mandate: small-cap US utilities plus communication services in one index, a corner the big sector funds barely reach.
• Live since 2010 as a plain 1940 Act index fund. No leverage, no derivatives overlay, no swaps.
• Pays distributions quarterly.

• VPU At 0.09% a year, it costs roughly a quarter of the median utilities fund fee. In a sector where the holdings barely differ between funds, the fee is most of the fight.
• Its MSCI Investable Market benchmark spans large, mid and small US utilities. XLU, by contrast, drafts only from the S&P 500 universe, so the smaller names never appear.vanguard.comssga.com
• The index's 25/50 caps exist to keep any single issuer under 25% and the pile of 5%-plus names under half the fund, a guardrail in a sector with a few giants.msci.com
• Plain full replication since 2004: buy the index, hold the index. Tracking here has been among the tightest in the US utilities group.

Worth knowing

• PSCU Thinly traded with a small asset base. Spreads and order size can cost more than the expense ratio.
• Two sectors, small caps only, about 40 names. It can move very differently from mega-cap utility funds like XLU or VPU.
• The cheapest broad utilities funds sit near 0.08%, so the small-cap tilt is what you are paying the extra for.

• VPU One sector, about 70 stocks. It swings on rate expectations and regulator decisions, with nothing outside utilities to cushion it.
• XLU and FUTY shave the fee to 0.08%, and XLU is the more heavily traded ticker if order size matters to you.
• Income arrives quarterly, not monthly, so the cash lands in four lumps a year.

Full PSCU profile⁠

Full VPU profile⁠