According to the latest economic report out of Westpac Banking Corp (ASX: WBC), its team expect the Reserve Bank to cut the cash rate down to 0.1% before the end of the year.
After which, the bank is forecasting rates to stay on hold at this level until at least the end of 2022.
I agree with this view and feel it could be many years before interest rates return to normal levels again.
In light of this, I would suggest income investors stick with dividend shares for the foreseeable future.
But which ASX dividend shares should you buy? Two I rate highly are listed below:
Rural Funds Group (ASX: RFF)
The first ASX dividend share to consider is this agriculture-focused property company. Rural Funds owns a total of 61 high quality properties which are leased to experienced agricultural operators on long-term agreements.
It is these long term agreements and their built in rental increases that most attract me to the company. These give Rural Funds great visibility on future earnings and, barring any unforeseen events, will allow the board to deliver on its target of increasing its distribution by 4% each year. In FY 2021 the company plans to lift its distribution to 11.28 cents per share. Based on the latest Rural Funds share price, this equates to a 4.8% yield.
Vanguard Australian Shares High Yield ETF (ASX: VHY)
Another option for income investors to consider buying is this dividend-focused exchange traded fund (ETF). The Vanguard Australian Shares High Yield ETF gives investors access to 65 of the highest yielding blue chip shares on the Australian share market. This includes the likes of utilities company APA Group (ASX: APA), banking giant Commonwealth Bank of Australia (ASX: CBA), and Bunnings owner Wesfarmers Ltd (ASX: WES).
I like the ETF for two main reasons – the diversity it offers investors and its attractive yield. In respect to the latter, I estimate that it offers a FY 2021 dividend yield in the region of 4% to 5%.
