Next week the Reserve Bank will meet once again to decide on the cash rate. At present the market is only pricing in a 22% probability of a rate cut at this meeting.
However, based on current cash rate futures, there is a 100% probability of a rate cut to 0.25% by May next year. This is likely to mean that the interest rates on offer with traditional income-generating assets will continue to weaken.
But don't worry because these ASX shares can help you beat the rate cuts with their generous dividends. Here's why I like them:
Aventus Group (ASX: AVN)
Aventus is a leading owner and operator of large format retail centres across Australia. It was a solid performer in FY 2019, delivering like for like net operating income growth of 3.5%. This allowed the company to grow its distribution by 1.8% to 16.6 cents per unit. Pleasingly, it recently held its annual general meeting and confirmed that it expects further solid growth this year. As a result, it expects to increase its distribution by 3% to 17.1 cents per security. This equates to a forward 6.1% yield.
National Australia Bank Ltd (ASX: NAB)
If recent events haven't put you off the banking sector, then I would suggest you consider buying NAB's shares. I thought it was the strongest of the big four banks in FY 2019 and believe this trend can continue for the foreseeable future. Especially given the improving housing market and its overweight exposure to SME lending. Another bonus is that a recent pullback means its shares now offer a trailing fully franked 6.3% dividend yield.
Vanguard Australian Shares High Yield ETF (ASX: VHY)
If you'd like to invest in a large and diverse range of shares but don't have the funds to do this, then this ETF could be one to consider. The Vanguard Australian Shares High Yield ETF provides investors with exposure to 60 of the highest paying dividend shares on the Australian share market. This includes the likes of NAB and the rest of the big four, mining giant BHP Group Ltd (ASX: BHP), and telco company Telstra Corporation Ltd (ASX: TLS). It currently offers a dividend yield of ~5.2%.
