Investors are clearly heeding the warnings from the Treasury market when it comes to utilities ETFs. Year-to-date, $636.2 million has been pulled from XLU. Investors have also yanked $1.1 billion from the iShares U.S. Utilities ETF (NYSEArca: IDU) and $155.1 million from the Vanguard Utilities ETF (NYSEArca: VPU).
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]
Utilities Select Sector SPDR
Chart Courtesy: Kimble Charting Solutions