It seems that more investors are eyeing dividend-oriented stocks ahead of the US Federal Reserve’s interest rate decision in September.

Paul Baiocchi of SS&C ALPS Advisors thinks this is a good strategy because he expects the Fed to cut interest rates.

“Investors are refocusing on dividends from money markets and fixed income, but also – importantly – on leveraged companies that could benefit from a falling interest rate environment,” the chief ETF strategist told CNBC’s “ETF Edge” this week.

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

In relation to S&P500both dividend ETFs are overweight healthcare, Finance And industrysaid Baiocchi. The ETFs close energy, Property And MaterialsHe describes the groups as three of the most unstable sectors on the market.

“There is not only price volatility, but also fundamental volatility in these sectors,” Baiocchi said.

He explains that this volatility would undermine the objective of OUSA and OUSM, which is to avoid a decline.

“You look for dividends as part of your methodology, but you look for dividends that are durable, dividends that have grown and that are well supported by fundamentals,” Baiocchi said.

Mike Akins, founding partner of ETF Action, views OUSA and OUSM as defensive strategies because the stocks generally have a clean balance sheet.

He also notes that the dividend category of ETFs is becoming increasingly popular.

“I don’t have a crystal ball that can explain why dividends are so popular,” Akins said. “I think people look at it like paying a dividend, and they have been doing that for years. The company’s balance sheet indicates its viability.”