Utilities: Bloody February Brings Valuations Back In Line
We don't see an end to this atypical volatility until interest rates rise back toward historical norms.
Getting a handle on utilities the past few years has been as hard for investors as predicting when the Federal Reserve will blink. Utilities were the best-performing sector in 2011, the worst-performing sector in 2012-13, and the best performing sector in 2014. The first part of 2015 is proving just as erratic with utilities trouncing every sector in January before falling 10% in February, the sector's worst stretch apart from the 2008, 2001, and 1974 market crashes. We don't see an end to this atypical volatility until interest rates rise back toward historical norms.
Travis Miller does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.