- "While the thirst for yield is understandable, it may be leading investors to overpay and take on hidden risks," says BlackRock CIO Russ Koesterich, noting defensive sectors like utilities (NYSEARCA:XLU) and consumer staples (NYSEARCA:XLP) are priced aggressively, but carry high interest rate sensitivity. Should rates rise even modestly in 2015, these sectors (REITs too) are likely to perform poorly.
- Yield can be found elsewhere, though, he says, pointing out cyclical sectors and high yield as areas to benefit from the improving economy.
- ETFs: XLU, XLP, IDU, VPU, VDC, FXG, RYU, UPW, FUTY, RHS, FSTA, PUI, FXU, PSL, SDP, PSCC, PSCU