There is perhaps no sector which exemplifies ‘risk-off’ more than Utilities. No sector has more consistent earnings, thanks to business which are highly regulated and rely heavily on long-term contracts. The Utilities also tend to pay large, stable dividends. These characteristics make them attractive places for investors to hide during economic turbulence (real or imagined).
Unsurprisingly, the sector outperformed during 2022, when US stocks were in the midst of their first extended bear market in more than a decade. But that bear market is a thing of the past. Utilities set their relative peak last October and have disappointed ever since.