FUTY vs TPZ

Key Takeaways

• FUTY is a low-cost, passive utilities ETF tracking the MSCI USA IMI Utilities 25/50 Index, while TPZ is an actively managed energy-infrastructure ETF with a broader energy-plus-utilities mandate.
• FUTY carries a 0.08% expense ratio and roughly 65 holdings; TPZ charges 0.85% and holds roughly 37–45 positions, reflecting meaningfully different cost and concentration profiles.
• FUTY is nearly pure utilities exposure (about 99%), whereas TPZ blends energy infrastructure (~59%) with utilities (~34%) and uses a covered-call overlay for additional income.
• Both funds share exposure to the electrification and data-center power theme through names like Constellation Energy and Vistra, but with very different weighting and risk structures.
• FUTY offers scale and liquidity (billions in assets), while TPZ is a smaller, recently converted fund still establishing its asset base and trading profile.

Introduction

Utilities and energy infrastructure have moved from the defensive periphery to the center of investor attention as rising electricity demand, data-center buildouts, and electrification trends reshape the sector. Comparing the Fidelity MSCI Utilities Index ETF (FUTY) and the Tortoise Electrification Infrastructure ETF (TPZ) is timely because these two funds pursue overlapping themes through sharply different structures. They do not compete as direct clones; instead, they represent alternative routes to similar goals—one a broad, index-based utilities sleeve, the other a concentrated, actively managed energy-infrastructure strategy. Understanding their structural differences is essential for investors evaluating sector exposure and relative positioning.

Fidelity MSCI Utilities Index ETF (FUTY) Overview

FUTY is a passively managed ETF that seeks to track the MSCI USA IMI Utilities 25/50 Index, a market-capitalization-weighted benchmark covering the U.S. utilities sector. The fund is non-diversified and holds roughly 65 to 69 positions, with nearly 99% of assets in utilities and only trace energy and industrial exposure. Its expense ratio is 0.08%, among the lowest in the sector.

Top holdings include NEE (NextEra Energy, roughly 12%), SO (Southern Co.), DUK (Duke Energy), CEG (Constellation Energy), AEP (American Electric Power), and VST (Vistra). Because it is market-cap weighted, FUTY is heavily tilted toward large-cap regulated utilities, though the inclusion of merchant power names such as Constellation and Vistra adds sensitivity to wholesale electricity prices and the AI-driven demand theme. The fund rebalances in line with its index and benefits from deep liquidity and a long track record dating to 2013.

Tortoise Electrification Infrastructure ETF (TPZ) Overview

TPZ is an actively managed ETF investing in energy and electrification infrastructure, including utilities, pipelines, liquefied natural gas (LNG) facilities, and electric transmission systems. Formerly named the Tortoise Essential Energy Fund and, before that, the Tortoise Power and Energy Infrastructure Fund, TPZ was converted into an ETF from a series of merged closed-end funds (CEFs) and adopted its current name in January 2026.

The fund charges a 0.85% expense ratio and holds roughly 37 to 45 positions, blending energy (~59%) with utilities (~34%). Top holdings include TRGP (Targa Resources), LNG (Cheniere Energy), ET (Energy Transfer), WMB (Williams), ETR (Entergy), and CEG (Constellation Energy). TPZ also invests in Master Limited Partnerships (MLPs—publicly traded partnerships that pass income through to investors), caps junk bonds and MLPs at 25% each, and employs a covered-call strategy on select positions to enhance income.

Industry and Thematic Backdrop

Both funds sit at the intersection of a powerful structural theme: the electrification of the economy. Surging electricity demand from data centers, reshored manufacturing, and electrified transportation is driving record capital expenditure (spending on infrastructure) across regulated utilities, independent power producers, and midstream pipeline operators. This has lifted earnings growth expectations for names spanning both portfolios and pushed utilities and energy infrastructure from classic income plays toward growth-oriented positioning.

The backdrop is not without risks. Utilities remain sensitive to interest rates, because their heavy debt loads and dividend yields compete directly with Treasury yields. Pipeline and midstream operators face commodity-price and volume cyclicality, while merchant power producers carry greater earnings volatility than regulated peers. Regulatory developments around grid investment, rate recovery, and LNG permitting also influence both groups, making sector exposure here more nuanced than a simple defensive allocation.

Performance and Positioning Comparison

In recent weeks and months, both funds have reflected the broader re-rating of power and infrastructure assets, but with different volatility profiles. FUTY has benefited from the sector-wide rally in regulated utilities and from momentum in merchant power names, while its low-cost structure has helped it track sector peers closely. TPZ's heavier energy weighting and midstream exposure have tied it more closely to commodity and cash-flow dynamics, and its covered-call overlay has tended to cushion downside while capping some upside during sharp rallies.

Relative positioning differs meaningfully. FUTY provides broad, low-cost utilities exposure with a defensive income tilt, while TPZ offers concentrated, yield-oriented energy-infrastructure exposure with a higher fee and smaller asset base. During periods when rate expectations fall and the AI-power theme accelerates, FUTY's merchant holdings have amplified gains; when energy prices and pipeline volumes strengthen, TPZ's midstream tilt has been the primary driver. Investors should weigh these factor sensitivities rather than isolated price moves.

AI Screener

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Tickeron AI Verdict

Based on observable factors, Tickeron's AI would likely favor FUTY for its structural advantages: a 0.08% expense ratio, broad diversification across roughly 65 holdings, deep liquidity, and pure, scalable utilities exposure. While TPZ's electrification theme and income-oriented covered-call strategy are relevant, its 0.85% fee, smaller asset base, and concentrated energy-heavy positioning introduce higher cost and idiosyncratic risk. A probabilistic, trend-consistent framework would generally prefer FUTY's cost efficiency and diversified sector exposure, while acknowledging TPZ as a complementary, higher-yield alternative for investors seeking concentrated energy-infrastructure and midstream exposure.

Disclaimer

The information on this webpage is provided for general informational and educational purposes only and is not intended as investment advice, a recommendation to purchase or sell any security, or an offer or solicitation related to investments. It does not consider your personal financial situation, goals, or risk profile, and all investing carries inherent risks, including the possibility of losing your entire investment. For more details, please review our full disclaimer.

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