Related: Utilities ETFs Look for Lift from Market Volatility

Wilson contended that mean reversion will cause in relative outperformance for low-risk assets, like utilities.Morgan Stanley is watching 10-year Treasury yields as a signal of changing conditions.

The utilities sector remains sensitive to changes in interest rates. Once the Federal Reserve eventually hikes interest rates, the higher rates will make fixed-income instruments more attractive on a relative basis, and bond-like equities, like utilities, less enticing. Consequently, utilities may remain flat or underperform other segments of the equities market once rates start ticking higher.

For more information on the utilities sector, visit our utilities category.