The recent climb in S&P 500 Utilities Sector SPDR (XLU) and S&P 500 Real Estate Sector SPDR (XLRE) is due to these sectors reclaiming their roles as bond substitutes as Treasury yields fall. Both sectors are capital-intensive and carry significant debt loads, benefiting from lower funding costs. The expectation of the Fed continuing a neutral policy stance has stabilized the bond market, allowing these rate-sensitive equities to gain momentum. Risks include rising federal debt levels and inflation data potentially reversing gains. ROAR scores indicate a slightly lower-than-normal risk for XLU and XLRE. Trading in these sectors should consider them as bond surrogates influenced by interest rates.

Read more at Barchart: How To Play These 2 Historically High-Yield Sector ETFs Amid Rally