While a rise in rates would diminish the attractiveness of dividend stocks with premium valuations and low growth, more high quality dividend payers or the group of dividend growers may stand out. DVY is levered to that theme with its cyclical exposure and by virtue of many of the ETF’s non-utilities holdings not being high-yield, but rather dividend growth ideas.

Although Fed funds futures indicate dwindling chances of the U.S. central bank raising interest rates when it meets later this month and perhaps just one rate hike before the end of this year, at the most, investors have recently been departing rate-sensitive consumer staples and utilities ETFs in a big way.

For income investors, the good news is that some market observers believe high-yield dividend stocks may be able to weather Fed storms better than many investors are trained to believe.

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Tom Lydon’s clients own shares of DVY.