Total return comparison
US utilities (XLU) have turned from leaders to laggards in the past three months due to the increased possibility of an interest rate hike by the Fed. A correction of more than 10% since July has also dented the total return performance of utilities. The chart below gives a total return comparison of top US sectors.
Remember, total return considers the stock appreciation along with dividends distributed during a particular time period.
By comparison, broader markets (SPY) have returned nearly 9% in the past year, underperforming utilities, while technology shares (XLK) have consistently performed well in any period under consideration.
In the next part, we’ll analyze technical indicators for utilities going forward.