Q: I own a variety of dividend ETFs , only utilities ETF and reit ETF are at a loss actually (5-9%), reits ETF being the lowest.
Is it a good time to "add on" in those 2 sectors and if not, what sectors for a revenue objective would be the safest considering the volatile markets and numerous world uncertainties ??
Is it a good time to "add on" in those 2 sectors and if not, what sectors for a revenue objective would be the safest considering the volatile markets and numerous world uncertainties ??
5i Research Answer:
Both utilities and real estate have been negatively impacted by the increase in interest rates in the last few years due to the long-duration nature of these assets. We think if rates bottom and start to decline from here this could be an opportune time to get more exposure to these sectors with some upside potential for capital appreciation along with a good yield. Utilities are generally a 'go to' sector when investors are worried. Real estate is less so but has good leverage to lower interest rates. Other stable, predictable sectors that are resilient against the macro environment could be consumer staples with some ETFs like XST, KXI, PSCC.