Related: Dividend ETFs for a Stubbornly Low-Yield Environment

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.

“Additionally, a cooling housing market presents another risk to DVY because of its utilities exposure. Importantly, the housing market has been improving for years, including a rise in home prices across the country, and an improving housing market could lead to higher electricity demand in developing areas, benefiting the utility companies that make up the bulk of DVY’s portfolio,” according to Seeking Alpha.

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Tom Lydon’s clients own shares of DVY.