stocks with steadily growing dividends—market favorites in recent years—haven’t been getting much respect lately. It may be time to give them another look.
Rising bond yields have also hurt, offering income hunters a clear alternative. After a decade of depressed levels, bond yields have risen nicely. The Federal Open Market Committee has aggressively raised short-term interest rates since March of 2022, pushing up yields as it battles inflation. Lerner also points to weakness in “parts of healthcare and utilities—the so-called bond proxies.” The healthcare sector has returned about minus 2%, and utilities are off by about 11% year to date.
“The bulk of performance has really been driven by a very small handful of stocks,” says Erin Browne, a portfolio manager at Pimco.
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