A bubble in danger

You may have noticed the rather pitiful performance of some of the infrastructure and utility stocks over the last 2-3 months. The utility sector is down 7.8% in three months, an underperformance of 12.4% relative to the All Ords index. This table shows the stocks we hold in the SMA and the MT Portfolios and their performance over various periods relative to the All Ords. The sector is still up 2% over 6 months and 6% over a year but is now getting left behind when the market rallies, begging the question, whether these ‘safe’ income stocks have hit their valuation ceiling. The problem now is that bond yields have bottomed globally and as they have the safe income sectors have lost their shine. In the article below, I look at the question of what to do now. (VIEW LINK)