Ram Ahluwalia favors utilities and financials over bonds as yields rise

Ram Ahluwalia, the CEO of Lumida Wealth, is telling investors to do something that sounds counterintuitive at first: stop buying bonds and start buying stocks that behave like bonds. Specifically, he’s pointing to utilities and financials as the sectors best positioned to absorb the impact of rising long-term yields while still delivering steady returns. The argument boils down to a simple trade. Bonds are getting cheaper as yields climb, which means their prices are falling. But utilities, which Ahluwalia describes as “bond proxies with low leverage,” offer similar income characteristics without the same degree of pain when rates move against you. Add in the fact that many utilities are now deeply intertwined with AI infrastructure buildout, and you get an asset class that looks like a bond but grows like a tech stock. Why bonds are losing their shine Long-term interest rates are facing sustained upward pressure from a cocktail of fiscal forces: government borrowing, onshoring initiatives, and elevated capital expenditure across multiple economies. Indian 10-year government bond yields, for instance, have climbed to approximately 7.18%, driven by rising oil prices and substantial ...