Uncertainty appears to be the theme of 2025. From tariffs to geopolitics, we have a nonstop flow of news that has vanilla investors quite rattled.
CNN’s Fear and Greed Index dipped back into the Extreme Fear zone earlier this week. Markets don’t like ambiguity. But that does not mean that we income investors need to sell everything. Heck, or anything! This is a split stock market and we contrarians are rolling with the dividend victors.
The bifurcated financial landscape is not news to us. We discussed the likelihood of major “winners and losers” in Trump 2.0 immediately after the November election:
Things have the potential to get wild. Fortunes made; retirements lost.
Thus far our Contrarian Income Report portfolio is doing quite well because we have smartly sidestepped ambiguity. Why place wild bets when we have safe monthly dividends that are steadily adding to our nest eggs?
Let’s talk about a sizzling 7.6% yield, paid every 30 days, that is another big winner from the energy revolution. Remember, we have a few megatrends converging in one direction here, so we want to maximize our dividend exposure. These wheels in motion are not affected by tariffs or geopolitics, either.
First, more electric vehicles (EVs) are hitting the road. The global market for EVs is projected to triple by 2033, regardless of the political, geopolitical or tariff environment. EVs create more demand on the power grid, period.
Adding to the grid’s grind is AI. Every week we see a new “must have” model released from leading technology companies. The newest shiny object is the latest and greatest version of ChatGPT, version 4.5. It puts DeepSeek back in its place.
But GPT 4.5 already has a reputation as a processing hog. It uses a lot of servers—aka juice. Power.
Electricity demand from data centers powering apps like ChatGPT already accounts for 5% of total US consumption. New models like GPT 4.5 will boost this demand massively further.
Boring old utilities are big winners. We called out Duke Energy (DUK) as a “power play” at the intersection of these megatrends. Duke’s operations fuel data center expansion for tech hubs in Florida and North Carolina.
#1 Monthly Dividend For Tariffs and Inflation
DUK pays 3.6%, which is “cute”—not even half of the scorching 7.6% divvie dished by Cohen & Steers Infrastructure Fund (UTF). DUK, by the way, is UTF’s six-largest position. The closed-end fund (CEF) owns 272 stocks that are all well-positioned to benefit from the joint boom in EVs and AI.
UTF’s status as a closed-end fund (CEF) explains the yield “anomaly.” Normally, it would take a stock market crash of epic proportions for us to see a 7.6% dividend paid by a utility ETF, or blue-chip name. In CEF-land, however, these deals arise because CEFs fly under the mainstream radar.
CEFs are too small for big institutional money. UTF has about $2 billion in assets under management. That’s a pond that is plenty big for us but too small for “whales” like pension funds.
Too bad for them! As a result the 7.6% dividend deal sits there for individual investors like us. UTF does tend to be volatile due to the erratic nature of vanilla retail holders. The fund is trading 6% off its recent highs. We welcome this buyable dip.
Longtime CIR subscribers know the fund well. The first time we bought and held UTF we enjoyed 95% gains. This is our second go round and we have already been treated to 37% total returns and counting. (And many of the profits were delivered to us in the form of UTF’s neat monthly payout!)
Plus, new rate trends are a tailwind for both UTF and the stocks it holds. Utilities behave like “bond proxies,” which means they rally as interest rates (especially long rates) fall. And rates are dropping because of the two “T’s”—tariffs and the Treasury Secretary.
First, tariffs. Headline readers believe they are inflationary but the data show that trade wars slow economic growth and thus bring lower rates. The 10-year Treasury yield has already fallen nearly 30 basis points since we talked about this phenomenon just two weeks ago!
Second, Treasury Secretary Scott Bessent is focused on lowering the 10-year Treasury yield. Bessent explicitly said: “?The president wants lower rates. He and I are focused on the 10-year Treasury.”
This is the first time in recent memory a Treasury Secretary has called out this benchmark yield as a goal. It is a notable shift from Trump 1.0, when the president was focused on lower short-term rates via the Fed. The bond market has taken note of Bessent. The 10-year yield is a full 50 basis points lower since he was nominated!
Plus, UTF will benefit from lower borrowing costs going forward. The fund employs 29% leverage, paying an interest rate that is tied to short-term rates. As long rates ease further and the economy slows from tariffs, short rates will drop too. This will be a nice savings on interest payments for UTF—another tailwind for its sweet 7.6% dividend.
Brett Owens is Chief Investment Strategist for Contrarian Outlook. For more great income ideas, get your free copy his latest special report: Your Early Retirement Portfolio: Huge Dividends—Every Month—Forever.
Disclosure: none
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