Summing up the state of affairs for the Utilities Select Sector SPDR (NYSEArca: XLU), the largest utilities ETF, is easy.

In 2014’s benign Treasury yield environment, the ETF surged nearly 29%, making it the best of the nine sector SPDR ETFs. This year, 10-year Treasury yields have been ticking higher, sending XLU to a loss of nearly 9%. That slide could be creating a contrarian play in the rate-sensitive utilities sector and XLU.

Entering Wednesday, XLU was in the midst of its worst 22-week decline since 2009 and only the major gold bugs was more oversold than the utilities, according to Chris Kimble of Kimble Charting Solutions.

While XLU has endured its worst stretch in six years, the rate-sensitive iShares 20+ Year Treasury Bond ETF (NYSEArca: TLT) experienced one of the worst 16-week rate of change declines in its 13-year history. Long-term bonds are most at risk of a rate hike. For instance, TLT shows a 17.7-year duration – duration is a bond fund’s measure of interest rate sensitivity. Consequently, a 1% rise in rates could translate to about a 17.7% decline in TLT’s price. In contrast, bond funds with shorter durations would have a lower sensitivity to rate changes. [Bearish Bond ETFs Back in Style]

Confirming the notion that long XLU is indeed a contrarian idea are investor departures from the ETF. Investors have pulled $783.2 million from the fund this year while yanking $1.72 billion from TLT. Those outflows have accelerated in the current. All of the assets shed by TLT have departed this quarter while XLU has bled $492.5 million since April 1.

Still, some investors see opportunity with rate-sensitive assets such as XLU and real estate ETFs, noting that 10-year yields are overbought and sentiment against the likes of XLU is at bearish extremes, which could create opportunity from the long side with the utilities sector. [Rethinking Rate Sensitive ETFs]