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This ETF Will Benefit From Americans' Higher Energy Bills
Authored by Jordan Chussler. Article Posted: 12/25/2025.
Quick Look
- Since President Trump’s second term began, Americans’ power bills have increased 13%.
- Simultaneously, natural gas prices are up 98% as the administration combats new renewable energy projects.
- The First Trust Utilities AlphaDEX Fund provides exposure to the utilities sector, which should benefit from elevated electric rates.
Americans' energy bills have increased by 13% since President Donald Trump took office in January 2025. While that's bad news for households with budgets already stretched thin, it could be a boon for sector investors as we head into the new year.
Unlike consumer discretionary stocks, which have been suffering, utilities—including heat and electricity—are essentials for every American home, so higher rates can boost revenues for companies in that sector.
$30 Silver Was a Gift. You Won't Get Another (Ad)
They wrote silver off as a "boring metal," but its move above $33 has forced analysts to reconsider what's really driving this market. With AI hardware, EVs, solar, and next-gen electronics all dependent on silver — while global supply continues to lag — this quiet setup is starting to look like one of the most overlooked opportunities in the commodities space.
Most investors still haven't connected the dots, which is why this new silver forecast guide breaks down the fundamentals behind the move, the real pressure building beneath the surface, and the steps to consider before silver becomes front-page news.
For investors looking to gain broad exposure, the First Trust Utilities AlphaDEX Fund (NYSEARCA: FXU) might be just the ticket.
Why America's Utility Bills Are Surging
The utilities sector is limping into the new year, having posted more than a 3% loss over the past month—the worst performance among all 11 sectors in the S&P 500. But when the calendar turns to 2026, that corner of the market could begin to enjoy long-term tailwinds.
Americans are facing substantially higher electric bills amid a backdrop of lagging renewable energy production, higher input costs for fossil fuel–powered generation, and growing AI-related electricity demand.
As the Trump administration continues efforts to revive the fossil fuel industry, permitting for renewable energy projects has slowed. Those policies have contributed to the delay or cancellation of nearly 25,000 megawatts of planned electric power production.
Put another way, the White House has effectively prevented the equivalent of electricity generation sufficient to power 13.17 million homes, according to a report released by Climate Power earlier in December.
Climate Power also found that natural gas prices are up 98% since Trump took office. That poses a problem, as the U.S. Energy Information Administration's data shows that natural gas accounts for more than 43% of U.S. electricity generation by source.
Meanwhile, growing demand from AI data centers is pushing rates higher nationwide. This trend has coincided with some AI stocks posting triple-digit gains in 2025, while several utility stocks have benefited as electricity demand surges.
That's good news for buy-and-hold investors. AI data centers currently account for 4.4% of U.S. electricity consumption; by 2030, that figure is expected to rise to an estimated 12%–20%.
At the same time, gas and electric utilities have raised or requested bill increases totaling more than $85 billion, leaving consumers in 49 out of 50 states facing higher utility costs.
Unless the data centers servicing AI companies are independently powered, growing electricity consumption is likely to boost the utilities sector's revenue and profits, which could benefit shareholders of the First Trust Utilities AlphaDEX Fund.
Diving Into the FXU
While investors often turn to large-cap utility companies like NextEra Energy (NYSE: NEE), Constellation Energy (NASDAQ:CEG), and Southern Company (NYSE: SO), or to sector ETFs that hold them, the First Trust Utilities AlphaDEX Fund operates differently.
The ETF aims for higher upside potential by including a broader set of companies. It tracks the StrataQuant Utilities Index, which selects holdings from the Russell 1000—an index that contains roughly twice as many companies as the S&P 500.
The index ranks stocks by growth factors—three-, six- and 12-month price appreciation and one-year sales growth—and by value factors such as cash flow and return on assets.
The result is a portfolio of utility stocks with higher growth potential and balanced allocations, a 0.63% expense ratio, and a dividend of $1.03 per share.
Those balanced allocations mean none of the fund's top holdings had a weighting above 5% at the time of writing. UGI Corporation (NYSE: UGI), currently the fund's largest position, is weighted at 4.83%, while American Electric Power (NASDAQ: AEP), its 10th-largest holding, is weighted at 3.42%.
Like the index it tracks, this approach reduces concentration risk. That has shown up over the past year: the XLU's S&P 500 utilities-sector focus produced an 11.35% year-to-date (YTD) gain in 2025, trailing the market, while the FXU gained 17.65% YTD and outperformed both the S&P 500 and the Russell 1000.
What Wall Street Thinks About the FXU
While the fund isn't illiquid, the FXU has average daily trading volume of just 256,355 shares compared with 22.32 million shares for the XLU.
That hasn't deterred institutional investors from including the ETF in their portfolios.
Over the past 12 months, institutions have put more than $610 million into the fund while outflows were limited to about $183 million. Meanwhile, short interest stands at an insignificant 0.25% of the FXU's float.
Because ETFs aren't rated the same way as single stocks, sentiment toward the companies inside the fund matters most. Based on 329 analyst ratings of those companies, the fund receives a Moderate Buy rating.
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