There is a market “truism” that needs to be set straight. In summary:

“Rising interest rates hinder high dividend equities.”

We'd rephrase it this way:

“Rising rates have been hindering high-dividend equities in the last couple of years, but over any sizable time frame, the causal relationship between rates and equity factors has been cursory at best.”

Growth stocks' leadership run ended on March 11, 2009, just days after the stock market bottomed, and high-dividend payers began to outperform in the early years of the economic recovery. Despite improving business conditions, bond yields kept falling until 2012. Those three years were among the few that do appear to confirm the popular “truism.”

Figure 1: Interest Rates Are Not Always the Arbiter of Performance