In response to expectations for an extended low-rate environment, utilities and other dividend-paying options with more attractive yields are strengthening. XLU has a 3.41% 12-month yield, VPU has a 3.27% 12-month yield and IDU has a 2.97% 12-month yield. [3 Yield-Generating, Utilities ETFs for Volatile Times]
Over the long-term, however, higher interest rates will make fixed-income securities more attractive on a relative basis. Consequently, bond-esque, dividend-paying stocks like utility companies will become less enticing.
Utilities Select Sector SPDR
For more information on the utilities sector, visit our utilities category.
Max Chen contributed to this article.