Slow and steady won the race in sector exchange traded funds this month as investors favored defensive ETFs tracking utilities stocks and dividend payers.

Every now and then I like to run a screen of my list of over 1,000 exchange traded fund and notes which ranks which areas of the investable landscape are the highest above their respective 20-day moving averages. The point in doing this is to see if there is a consistent message underlying market dynamics over the past rolling month period. This is not to suggest necessarily that continued strength is likely, however momentum can be a very powerful phenomenon.

The main takeaway here is that four of the top 10 ETFs and ETNs on the list are utilities trackers such as Utilities Select Sector SPDR Fund (NYSEArca: XLU).

In a way, this should not come as a surprise. If the bond market’s way of investing in the stock market is to tilt towards high-yield corporate or “junk” bonds, then logically it makes sense that the stock market’s way of playing the bond market is through utilities. [Utilities Hold Up]

Utilities tend to be one of the most correlated sectors to the bond market because of the high fixed-cost nature of providing electricity and ongoing infrastructure maintenance, which generally must be financed through debt. [Lower-Risk Stock ETFs]

What this means is that the direction of interest rates is perhaps one of the most important determinants to utilities outperforming broader markets. While it’s a boring sector and not as exciting as silver or gold miners, slow and steady can win the race when entering periods of deflationary/recessionary scares.

Disclosure: The author, Pension Partners, LLC, and/or its clients may hold positions in securities mentioned in this article at time of writing. The commentary does not constitute individualized investment advice. The opinions offered herein are not personalized recommendations to buy, sell or hold securities.