Dividend stocks as a hot play into fall due to Fed and interest rates [Video]

It appears more investors are eyeing dividend stocks ahead of the Federal Reserve’s interest rate decision in September.

Paul Baiocchi of SS&C ALPS Advisors thinks it is a sound strategy because he sees the Fed easing rates.

“Investors are moving back toward dividends out of money markets, out of fixed income, but also importantly toward leveraged companies that might be rewarded by a declining interest rate environment,” the chief ETF strategist told CNBC’s “ETF Edge” this week.

ALPS is the issuer of several dividend exchange-traded funds including the ALPS O’Shares U.S. Quality Dividend ETF (OUSA) and its counterpart, the ALPS O’Shares U.S. Small-Cap Quality Dividend ETF (OUSM).

Relative to the S&P 500, both dividend ETFs are overweight health care, financials and industrials, according to Baiocchi. The ETFs exclude energy, real estate and materials. He refers to the groups as three of the most unstable sectors in the market.

“Not only do you have price volatility, but you …