Nevertheless, investors should still be aware that a rising rate environment will have a negative effect on the utilities sector. Higher rates typically make fixed-income instruments more attractive on a relative basis.
“Longer-term, in a rising-rate environment, we would expect flat returns at best for utilities companies and underperformance when compared with other equity sectors,” Goldsborough said.
Utilities Select Sector SPDR
For more information on the utilities sector, visit our utilities category.
Max Chen contributed to this article.