As I mentioned here earlier, the Westpac Banking Corp (ASX: WBC) economics team is not ruling out negative interest rates in the near future.
While I don't personally expect rates to drop any further from here, it certainly is a possibility in the current environment.
Whether or not they do go lower, only time will tell. But one thing that I'm certain about, is that rates will be staying at ultra low levels for years to come.
In light of this, I think investors in search of income ought to look to the share market.
Three top ASX dividend shares that I would buy are listed below. Here's why I like them:
Dicker Data Ltd (ASX: DDR)
Dicker Data is a growing distributor of computer hardware and software. It has an incredibly resilient business that continues to grow during the pandemic. So much so, this year the company intends to increase its dividend by 31% to 35.5 cents per share. This equates to a fully franked 4.5% dividend yield based on its last close price. Another positive is that Dicker Data is one of just a handful of ASX dividend shares that pay their dividends in quarterly instalments.
Rural Funds Group (ASX: RFF)
Rural Funds is a property company with a focus on Australian agricultural assets. Its properties are leased to experienced agricultural operators on long term tenancy agreements with fixed rent increases built in. This provides the company with a lot of earnings visibility. As a result, it has been able to provide distribution guidance for FY 2020 and FY 2021. It plans to pay shareholders 10.85 cents per share this year and then 11.28 cents per share next year. The latter equates to a 5.6% distribution yield.
Vanguard Australian Shares High Yield ETF (ASX: VHY)
A third option for income investors to consider is the Vanguard Australian Shares High Yield ETF. I think this is one of the best exchange traded funds for income investors. This is because it gives investors exposure to a diverse group of high yielding ASX dividend shares through a single investment. At present I estimate that its units provide a forward dividend yield of at least 4.5%.
