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Quarter-End Insights

Utilities Shaking the Interest-Rate Stigma

Strong fundamentals should allow the sector to continue producing positive returns even as interest rates climb.

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Most investors wouldn’t expect gains from their defensive, income-oriented holdings as interest rates shoot up. But that’s exactly what utilities have offered investors. Even though utilities have trailed the market, the sector is up 7.6% since last August even as 10-year U.S. Treasury rates have tripled.

Utilities have been worst-performing sector since the market bottom - source: Morningstar

Travis Miller does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.