Only energy and consumer discretionary performed worse in January among S&P 500 sectors than consumer staples. Three of the biggest staples names – Coca-Cola (NYSE: KO), Procter & Gamble (NYSE: PG) and Wal-Mart (NYSE: WMT) – were among the worst performers in the Dow Jones Industrial Average.
Of course, there is another side to the story that income investors cannot gloss over. First, there can be no guarantees that Treasury yields will continue their current downward trajectory. Second, some analysts see the utilities sector as laden with potential dividend cutters. FirstEnergy (NYSE: FE), SPHD’s largest holding has already slashed its payout this year. Exelon (NYSE: EXC), another top-five holding in SPHD, cut its payout last year. [Beware of Lower Utilities Dividends]
SPDR S&P Dividend ETF
Tom Lydon’s clients own shares of Coca-Cola, P&G and DVY.