Utilities Down As Flight From "Bond Proxies" Continues - Utilities Roundup

Shares of power-plant operators fell as Treasury yields continued to rise, perpetuating a rotation out of dividend-oriented sectors. "Within the bond proxy sectors, fund managers have been increasing their underweight in Staples and Utilities in favor of Telecom and Real Estate over the past three months," said analysts at brokerage Bank of America Merrill Lynch Global Research, in a note to clients. "Managers have now cut their exposure to Staples and Utilities for four straight months, resulting in record underweights for both sectors." The rise in Treasury yields has prompted bets that fixed-income investors will abandon the utility sector, to which they are drawn during periods of low bond yields. "Bond proxies like REITs and utilities are lagging the broader market as interest rates rise," said Bob Doll, chief investment strategist at money manager Nuveen Investments, in a note to clients. -Rob Curran, rob.curran@dowjones.com

(END) Dow Jones Newswires

January 29, 2018 16:25 ET (21:25 GMT)