Over the past month, the utility sector select sector SPDR fund rose 6.1%, while the Roundhill “Big Seven” ETF fell 4%.

Recently, utility stocks have performed as well as technology stocks. In fact, they have surpassed even the hottest stocks on the market in recent weeks.

Over the past month, the Utility Sector Choice Sector SPDR Fund rose 6.1%, while the Roundhill “Big Seven” ETF fell 4%. The S&P 500 is up 0.4%.

The fact that one of the most stable sectors of the economy is surpassing the hottest stocks shows that the market is undergoing an important shift. Moreover, there is reason to believe that the rise in utility stocks is expected to continue. Looking to the end of the year, their prospects look very strong.

Utility stocks are attractive to investors who like solid dividends and want to avoid wider economic uncertainty. But now, their fan base seems to be growing. Hedge funds have increased their long positions in utility stocks over the past month, according to a survey released by Evercore this week.

There are a number of reasons for the strong performance of utilities stocks. First, in anticipation that the Federal Reserve may cut interest rates, the yield on treasury bonds and other safe investments is declining, and dividend yields on utility stocks are becoming more attractive. The average utility stock has a dividend yield of 3%. In contrast, the yield on 10-year treasury bonds was 3.9%, down from 4.7% in April. Treasury yields are likely to fall further as the Federal Reserve begins to cut interest rates.

Utility stocks are also benefiting from the trend of the market shifting from the most popular stocks to a wider range of companies. Investors seem to be looking for those less familiar market winners. Recently, a fund that tracks the S&P 500 index with equal weight performed better than market capitalization-weighted indices. As employment growth slows and the possibility of a recession increases, utility stocks provide more security than most other sectors.

Evercore analyst Durgesh Chopra said, “Historically, the sector usually produced positive returns within 3-6 months of the recession, and outperformed the S&P 500 in the early stages of the recession.” Even without a recession, investors are likely to flock to utility stocks when the economic news is bad.

Utility stocks are also benefiting from the fact that data shows an increase in demand for their services. Demand for electricity has remained stable over the past decade, and is expected to increase significantly over the next decade. With the spread of electric vehicles and data centers, analysts expect utility companies will have to make massive investments in power grids to keep up with demand.

Regulators often allow utilities to reap returns on new investments such as power plants or transmission lines, all of which will be in high demand over the next few years. Independent power producers (which are another type of stock classified as utilities) should also benefit. Since this year, shares of companies such as Vistra Energy (VST.N) and Constellation Energy (CEG.O) have soared by more than 50%. Unlike regulated utilities, these companies don't need a license to earn high returns; their power plants sell electricity in competitive markets and reap disproportionate returns when demand rises.

The valuations of these stocks aren't cheap, but they're still attractive compared to the larger market. The average utility stock price-earnings ratio in the S&P 500 index is 18 times lower than 21.9 times that of the S&P 500 index.

Utility stocks will not replace the “Big Seven Tech Stocks” in the investor portfolio. They still only account for 2.4% of the S&P 500. But they are back in favor, and the rally may not be over yet.