With a September rate hike looming, analysts highlight USAI, HDV, and DIA as top monthly dividend ETFs to navigate economic uncertainty and rising Treasury yields.
HDV is presented as a newly monthly-paying dividend ETF with low tech exposure and high yield that should fare well during a rate hike, offering diversification.
The article highlights USAI as a monthly dividend ETF benefiting from energy infrastructure boom, with 4.02% yield and year-to-date gains, making it a buy before potential rate hike.
DIA is recommended as a monthly dividend ETF least vulnerable to rate hikes, with holdings like Goldman Sachs benefiting from higher rates.
As markets price in a 55-60% probability of a September interest rate hike, investors are pivoting toward defensive, income-generating assets. ETFs like USAI, HDV, and DIA offer distinct advantages, from energy infrastructure exposure to financial sector tailwinds, providing a strategic buffer against potential volatility and inflationary pressures.
Analysts suggest these ETFs as a defensive strategy to mitigate volatility and capture income, as rising Treasury yields and persistent inflation increase the likelihood of a 25-basis-point rate hike.