w2j2

???? Good Question::

Past performance is not a prediction of future returns!

But lets look at the period from January 2005 - January 2008 when the interest rates went up (especially short term):

We can use the Dow Jones Utility index for proxy of Utilities.

______ STOCK
Value Jan 08
Last Dividend in 07
Value Jan 05
Last Dividend in 04

AES	AEP	CNP	D	DUK	ED	EIX	EXC	FE	NEE	NI	PCG	SO	WMB
						
19.09	39.96	13.55	38.01	15.74	36.87	47.23	67.5	61.97	57.91	15.87	36.63	31.6	29.98
0	0.41	0.17	0.20	0.22	0.58	0.305	0.44	0.5	0.41	0.23	0.36	0.403	0.1
14.05	27.22	8.57	27.70	11.7	32.00	27.41	36.05	31.25	31.36	16.91	28.41	25.42	15.15
0	0.35	0.1	0.33	0.275	0.57	0.25	0.4	0.375	0.34	0.23	0.3	0.358	0.05

So for a total of one share of each stock:

January 08 "Principle" of $511.91 w/ dividend of $4.326

Definitely up from

January 05 "Principle" of $333.20 w/ dividend of $3.926

SO-
Over this time period:
Principle growth of approximately 42%, ~12.2% annualized
Dividend growth of approximately 9.7%, ~3.1% annualized

Dividends = 3.3% yield on current price or 5.19% yield on investment price which ever way you prefer to look at it.

So based on this - I would say, NO! Just because interest rates go up - does not mean your principle will go down!



d(Utility)/dT

Who left PEG out of the equations cause being the under achiever - didnt want to dig up historical prices for that bugger. But will note - was not a very good time for them and may bring the numbers down but not directly related to interest rates!!