If you had to decide between Telstra stocks or one of the big banks at the moment, which would you choose?
"You'd probably choose both, if you were looking for income" ATI Investment's head of research, David Liu, said.
The response says a lot about the current environment.
There is a lack of conviction and confidence among some fund managers about the earnings profile of resource stocks.
There is uncertainty about the future direction of commodity prices. There is uncertainty about the demand profile of China and the political environment in Australia.
Even though mining giants such as BHP Billiton and Rio Tinto have higher valuations than they have in the past, relative to the major banks and Telstra, the "marginal dollar" of investors is still being invested in banks and telecoms.
That is because they are considered a "safety trade" and viewed as having an earnings profile that can sustain the yield of the companies, Mr Liu said.
Citigroup banking analyst Craig Williams said in a note this week that bank dividend yields would continue to attract investors while alternative investments provided "significantly lower returns" and the earnings and dividend outlook for the sector remained solid near term. "All we can say is buy ANZ, Commonwealth Bank and Westpac today!" he wrote.
Mr Williams made that pronouncement on the day ANZ shares surged to a record high, inspiring a sector-wide rally, after it vowed to give shareholders a bigger slice of future profits and increased its dividends by a bigger than expected 11 per cent to 73¢ a share.
On Friday, Westpac announced a fully franked dividend of 86¢ a share, up 4¢ on the same half last year. It came after a 10 per cent boost in half-year profits to $3.53 billion.
But Telstra has also been performing strongly, breaking through the $5 barrier this week, at a five-year high.
It is also one of the best-performing blue chips on the ASX so far this year, its share price rising more than 11 per cent since the Coalition announced its plan to build a cheaper version of the national broadband network.
"The market's saying there's a lot of value and opportunity in the resources sector, that's where the value trade lies," Mr Liu said.
But not everyone feels as warmly about the banking sector.
UBS banking analyst Jonathan Mott warned the banking sector could be in a bubble.
"We are conscious of the bull case for Aussie banks and all 'yield' stocks," he said.
He noted further quantitative easing, interest rate cuts, falling term deposit rates, asset allocation flows into equities, the "least worst investment", and the value of franking credits were all contributing to the banks' rise.
But those bank dividends were a result of significant leverage, Mr Mott said.
"As with all asset bubbles, they can go higher and for longer than many expect ... all we can say is buyer beware."