Tobias Levkovich, chief U.S. equity strategist at Citi, cautions investors against paying too much for traditional safety trades.
He said his firm is worried that investors have taken this investing theme "a bit too far." As U.S. Treasurys are yielding less, people are looking for alternatives and buying into dividend-yielding sectors like telecom and utilities, which have become expensive and crowded trades.
"That's what I worry about. They've been buying some of these defensive sectors, paying up very handily for the yields that they generate in almost a desperate search for income," he told CNBC's "Power Lunch" on Wednesday.
Levkovich said that when investors pay too much for defensive plays, "they start becoming a little less safe and a little less defensive." In general, these trades are "not as safe as they were."
"In some instances, I'd be very worried. Utilities, for example, are trading on a price-to-sales basis at 25-year highs. They're not going to generate 30 percent earnings growth. They just don't," he said.