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After the bruising start to the New Year, it may seem like everything is losing value. After the close of trading on Feb. 5, the S&P/TSX Composite was down 1.9 per cent for 2016. Most sectors were in the red, with but there was a notable exception as far as income investors are concerned: Utilities were showing a 7.5-per-cent gain for the year, reflecting the flight to safety mentality of the markets.

Utility stocks should have a significant weighting in every income-oriented portfolio because they typically offer a combination of dependable cash flow and low risk. They are interest-sensitive, so they will tend to lose value during periods when rates are rising. Right now, that looks to be at least a year or two away in Canada.

Canadian utility stocks I especially like are Fortis Inc. (FTS-T) and Emera Inc. (EMA-T). But if you'd like to own a portfolio of these securities, take a look at the BMO Equal Weight Utilities Index ETF. Here are the details.

Type: Exchange-traded fund
Trading symbol: ZUT
Exchange: TSX
Price (Feb. 5): $15.50
Entry level: Current price
Annual payout: $0.69 (2015)
Yield: 4.45 per cent
Risk level: Moderate
Website: http://www.etfs.bmo.com/bmo-etfs/glance?fundId=75756

The security: This ETF tracks the performance of the Dow Jones Canada Select Equal Weight Utilities Index, net of expenses. The portfolio consists of 11 stocks. The largest holdings are Algonquin Power and Utility (10.3 per cent), Northland Power Inc. (10.2 per cent), and Just Energy Group Inc. (10 per cent). The fund has total assets of $155.4 million.

Why we like it: This ETF provides exposure to broad range of Canadian utilities on a more or less equal-weighted basis. It offers good cash flow, although the distributions are not guaranteed and may vary.

Performance: The fund was launched in January 2010 and was showing an average annual compound rate of return since inception of 5.15 per cent as of the end of January. Over the past three years, the average annual gain has been 1.8 per cent, so don't expect to get rich with this one.

Risks: The previous comments about interest sensitivity apply here. As well, there some of the companies in the portfolio are quite small and have shown more market volatility than bigger firms like Fortis and Emera.

Cash flow: The ETF increased its monthly payouts twice in 2015. They began the year at $0.055 per unit, moved to $0.058 in June, and were raised again to $0.06 in September, where they are currently. If the present payout level is maintain through 2016, investors would receive $0.72 per unit over the year for a yield of about 4.6 per cent based on the current price.

Who it's for: This ETF is suitable for investors who prefer to spread their risk over several companies and are looking for more cash flow than they would receive by owning shares in some of the largest and most popular utilities such as Fortis and Emera.

Ask your financial adviser is this ETF is a good fit for your needs.

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