No one seems to know exactly when the Federal Reserve will raise interest rates. It could happen next week, maybe later this year or perhaps the central bank has, as some believe, missed its rate-hiking window altogether.
If the Fed does proceed with boosting interest rates, it makes sense for investors to be prepared. That task is made easier at the sector with exchange traded funds because, as has been widely documented, some sectors perform better than others against the backdrop of rising rates.
In a note out Friday, Bank of America Merrill Lynch examined the sectors that perform well after Fed liftoff, those that disappointed and those that were somewhere in the middle. Bank of America used the prior six tightening cycles beginning March 1983, January 1987, March 1988, February 1994, June 1999 and June 2004.
Below is a look at “which sectors performed best and worst going out one to 12 months following a Fed tightening cycle liftoff.”
Remembering that 1999 was the first full trading year for the nine sector SPDR ETFs (the funds debuted in late ...
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