Why are utilities misunderstood by investors?

Proxy for index-linked bonds

The second half of 2016 could be seen as something of an inflection point for equity and bond markets.

Fiscal policy is expected to become more accommodative, with monetary policy more restrictive to compensate, although clearly this process is at different stages in different places. Bond yields have risen, and the equity market has begun to move away from the more defensive or bond proxy sectors to refocus on cyclical growth. Close to home, one area which has not performed well are the UK-regulated utilities such as the water companies and National Grid.  Indeed, their share prices are typically trading some 10% below where they were six months ago, a mirror image of the FTSE All-...