Income Opportunities Amid 2025’s Financial Uncertainty

Uncertainty is the defining theme of 2025. Tariffs and political tensions create a continuous stream of news that has left many investors uneasy. CNN’s Fear and Greed Index recently dropped back into the Extreme Fear category, signaling that markets are not comfortable with ambiguity. However, for those of us focused on income investments, there is no need to panic. We can choose not to sell anything, as this remains a bifurcated stock market. Instead, we are embracing the dividend stocks that continue to perform well.

Recognizing the split financial landscape is essential. We highlighted the potential for major “winners and losers” in the upcoming Trump 2.0 immediately following the November elections:

Things have the potential to get wild. Fortunes made; retirements lost.

Our Contrarian Income report portfolio has fared well thus far by avoiding ambiguity. Why gamble when we can secure safe monthly dividends that consistently add to our growing nest eggs?

A notable opportunity right now is a hot 7.6% yield, disbursed every 30 days, connected to the ongoing energy revolution. There are several megatrends converging in favor of dividend expansion, largely unaffected by tariffs or geopolitical strife.

The surge of electric vehicles (EVs) on the road is a significant factor. The global market for EVs is expected to triple by 2033, independent of political or tariff dynamics. As EV adoption grows, so does the demand on our power grid.

Artificial Intelligence (AI) is also ramping up electricity demand. Each week brings new innovations from leading tech companies. The latest version of ChatGPT, version 4.5, is currently turning heads, overshadowing models like DeepSeek.

This powerful version, however, is known to be a significant consumer of processing power—meaning it requires substantial electricity. Currently, data centers that support apps like ChatGPT are responsible for 5% of total U.S. electricity consumption, and the demand is set to grow as newer models are released.

Boring utilities are surprisingly well-positioned in this environment. We previously identified Duke Energy (DUK) as a key player at the intersection of these major trends. Duke supports the expansion of data centers in tech-rich regions like Florida and North Carolina.

While DUK offers a 3.6% yield, which is modest compared to the impressive 7.6% provided by the Cohen & Steers Infrastructure Fund (UTF), DUK remains a significant component of UTF’s portfolio. UTF is a closed-end fund with 272 stocks that are well-positioned to benefit from the dual growth in EVs and AI technology.

UTF’s Attractive Monthly Dividend

The peculiar yield of UTF indicates its status as a closed-end fund (CEF). Typically, to see a 7.6% dividend from a utility ETF or a blue-chip stock, the market would have to face a serious crash. In CEFs, however, such opportunities often arise unnoticed by mainstream investors.

CEFs are generally too small to attract major institutional investment. With approximately $2 billion in assets under management, UTF offers a compelling opportunity for individual investors, but larger entities often overlook it.

This situation benefits investors like us. Despite UTF’s susceptibility to volatility linked to retail trading behaviors, the fund is currently priced about 6% below its recent highs. This presents a buying opportunity.

Longtime CIR subscribers are familiar with this fund. Our initial investment in UTF yielded 95% returns. As we engage for the second time, we have already gained 37% total returns, much of which has been enjoyed through UTF’s consistent monthly payouts!

Additionally, current rate trends act as a supportive tailwind for both UTF and its holdings. Utilities often serve as “bond proxies,” meaning they typically rally when interest rates, especially long-term rates, decline. Falling rates are a result of two influences: tariffs and Treasury Secretary Scott Bessent.

Many associate tariffs with inflation; however, data reveals that trade wars delay economic growth, which usually leads to lower interest rates. The yield on the 10-year Treasury has already dropped nearly 30 basis points since we last discussed this issue two weeks ago!

Treasury Secretary Scott Bessent has prioritized lowering the 10-year Treasury yield. He openly stated, “?The president wants lower rates. He and I are focused on the 10-year Treasury.”

This is a distinct change from previous administrations, as it highlights a shift in focus on long-term rates rather than just short-term ones. The bond market has responded, with the 10-year yield down 50 basis points since Bessent’s nomination!

Moreover, UTF stands to benefit from reduced borrowing costs moving forward. The fund employs 29% leverage that is tied to short-term rates. As long-term rates decline and the economy slows due to tariffs, short-term rates will also decrease. This development will result in savings on interest payments for UTF—another boost for its attractive 7.6% dividend.

While UTF’s monthly payout is regarded as modest by my personal standards, I generally prefer yields exceeding 8% that are paid monthly. Click here to discover my top fund recommendations, including names and tickers.

also see:

• Warren Buffett Dividend Stocks
• Dividend Growth Stocks: 25 Aristocrats
• Future Dividend Aristocrats: Close Contenders

The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.