In contrast, SPLV is overweight consumer staples and utilities, two sectors that are not included in SPHB’s underlying portfolio.
“Such sector exposure is positive in light of recent developments. The yield on the 10-year Treasury note has moved higher since the end of the third quarter to 1.8% from 1.6% and the Federal Reserve’s minutes indicate a near-term rate hike is likely,” Rosenbluth said. “Higher bond yields have caused, and could continue to cause, investors to rotate away from income-oriented sectors such as consumer staples and utilities.”
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PowerShares S&P 500 High Beta Portolio