If interest rates finally do see a sustained rise, income investors could start to migrate back to bonds and away from dividend-paying stocks.
Russ Koesterich, BlackRock’s chief investment strategist, this week warned investors to be cautious about those areas of the financial markets where valuations have become more distorted by unusual monetary conditions, Barron’s reports. These sectors include dividend payers such as the utilities sector, Koesterich noted.
The charts below show the relative performance of XLU, the utilities ETF, against the S&P 500.
