Since April 30, 10-year Treasury yields have surged a jaw-dropping 71.2%.

Although 2013 has been a remarkable year for dividend ETFs, both in terms of increased number of products and asset-gather acumen, that rise in Treasury yields has turned some of the largest dividend ETFs into market laggards.

“The Dow Jones U.S. Select Dividend Index has lagged behind the Standard & Poor’s 500 Total Return Index by 4.6 percentage points on a total-return basis since April 30,” report Anna-Louise Jackson and Anthony Feld for Bloomberg.

The Dow Jones U.S. Select Dividend Index is the underlying index for the $12.4 billion iShares Select Dividend ETF (NYSEArca: DVY). DVY, one of the largest U.S. dividend ETFs, by assets, is up 8% since April while the SPDR S&P 500 (NYSEArca: SPY) is higher by 12.7%. However, DVY is not the only dividend ETF lagging the broader market as rates rise.[Rising Rates Pressure Dividend ETFs]

Shares of telecommunication, utility and real-estate investment-trust companies have been hardest hit, Bloomberg reports, citing Brad Kinkelaar of PIMCO. Kinkelaar tells Bloomberg that those income-generating sectors will continue to lag if rates rise in 2014 as expected. “The yield on 10-year Treasuries will increase to 3.37 percent by the end of 2014, according to the median forecast of economists surveyed by Bloomberg.”

Since telecommunications is the smallest sector weight in the S&P 500, it is rarely a significant sector allocation in dividen ETFs, but the same cannot be said of rate-sensitive (and pricy) utilities and consumer staples stocks. Utilities are DVY’s largest sector weight at 27.2%, well ahead of the 18.9% allocated to industrials, a sector that historically performs well as rates rise.