Since the first iteration of the Federal Reserve’s Quantitative Easing (QE) program were announced nearly a decade ago, traders have been calling for an end to the 35-year bull market in US bonds (i.e. falling yields).
Utilities are often called "widow and orphan" stocks for the stable, lower-risk income they can provide. In addition to having minimal sensitivity to broader macroeconomic trends, the utility sector has the highest dividend yield (3.26%) of the major sector exchange-traded funds we track.
Even as bond managers have taken on more risk as 2014 progressed, they’re still looking to shield against rising yields that can lead to losses on fixed-income securities.