Only the consumer staples and discretionary sectors are currently more expensive than utilities. Still, the XLU and the broader utilities sector have their supporters.

XLU added over $1.7 billion in assets last year and in December, it was noted that XLU’s relative strength when measured against the S&P 500 was flirting with a breakout, one that has since been confirmed. That could signal a potential rally for utilities in 2015 as well. Additionally, a breakout would also confirm the low rates thesis that Treasury yields will remain low, pushing investors to alternative sources for income.

Utilities Select Sector SPDR

Chart Courtesy: Kimble Charting Solutions