John Bartlett, president and portfolio manager of Reaves Asset Management, joins Real Vision’s managing editor Ed Harrison to discuss the utilities sector, an asset class where investors can take bond-like risk yet get high single digit returns. However, the utility space is being buffeted by rapid technological changes. Bartlett has spent nearly three decades investing in utilities stocks and manages the Reaves Utility Income Fund (UTG), a closed-end fund with nearly $1.9B in AUM, and the Reaves exchange-traded fund, the Virtus Reaves Utilities ETF (UTES). He explains why his firm believes the changes are a boon for the utilities space, and he identifies the emerging technology and infrastructure that is changing the space and why investors are paying more attention to companies that have true Environmental, Social and Governance (ESG) attributes. Filmed on May 24, 2021.
Utilities are still a very small part of the S&P 500. They are defined as a sector, but Reaves views them more as an asset class that people can put to use in their portfolio and actually do something unique for either themselves or for their clients. Utilities have become the bond substitute, yielding around 3% as dividends grow coincident with earnings.