With these classic safe havens providing little protection, the financial and health care sectors may be worth considering. Banks are a potential beneficiary of higher rates, and despite broader stock market weakness, the S&P 500 financial sector was actually up last week. For investors looking at more defensive parts of the market, health care stocks, utilities or telecommunications could be considered. Unlike the latter two, health care has generally performed relatively well in a rising-rate environment.
Sources: Bloomberg, BlackRock
Russ Koesterich, CFA, is the Chief Investment Strategist for BlackRock. He is a regular contributor to The Blog.