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The utilities sector has been much talked about since Warren Buffet and Bill Gross threw their support behind it. We thought it would be interesting to take a look at the historical yields of utilities vs. the 10-year Treasury yield. The current spread provides an opportunity to short the 10-year Treasury yield and go long utilities. Should the yield spread contract to historical levels, this strategy would have the potential for significant appreciation.

The screen below shows ETF and CEF utility funds with dividend yields over 3%.


disclosure: no positions



Disclosure: No positions

Source: Utility Dividend Yields vs. 10-Year Treasuries