High Yield Dividend Opportunities in Telecom, Media, and Tech Sectors: Leveraging XHYT for Income and Growth in a Rising Rate Environment

The global economic landscape in 2025 remains shaped by persistent inflation and rising interest rates, creating both challenges and opportunities for investors. While higher borrowing costs traditionally weigh on capital-intensive industries, the telecom, media, and technology (TMT) sectors are demonstrating resilience through innovation and strategic reinvention. For income-focused investors, the BondBloxx USD High Yield Bond Telecom, Media & Technology Sector ETF (XHYT) offers a compelling vehicle to capitalize on this dynamic. With a dividend yield of 7.53% and an expense ratio of 0.35%, XHYT combines the appeal of high-yield bonds with sector-specific exposure to TMT companies navigating macroeconomic headwinds [3].

Sector-Specific Resilience in a Rising Rate Environment

The TMT sectors are uniquely positioned to adapt to higher interest rates. In telecom, companies are leveraging AI and 6G development to drive efficiency and unlock new revenue streams, even as global stocks in the sector lagged behind broader markets in 2024 [1]. For example, EchoStar Corp. and DISH Network—two of XHYT’s top holdings—represent firms reinventing themselves through satellite-based 5G infrastructure and spectrum monetization strategies [2]. These innovations mitigate the drag of higher borrowing costs by enhancing operational scalability.

The media sector, meanwhile, is thriving on the back of digital advertising growth and AI-driven content creation. The global entertainment and media industry is projected to reach $3.5 trillion by 2029, with digital advertising accounting for 40% of total revenue [4]. XHYT’s exposure to high-yield bonds in this space aligns with companies adopting direct-to-consumer models and integrating AI to reduce production costs while expanding audience reach [5].

Technology firms are also navigating rising rates by prioritizing capital efficiency and AI adoption. Global IT spending is expected to grow by 9.3% in 2025, with generative AI driving a 29% CAGR in AI-related expenditures from 2024 to 2028 [2]. XHYT’s holdings in firms like Tibco Software Inc. and Cloud Software Group Inc. reflect this trend, as these companies benefit from demand for cloud infrastructure and enterprise software solutions.

XHYT: A Strategic Balance of Income and Growth

XHYT’s focus on high-yield bonds in the TMT sectors provides dual advantages. First, its 7.53% dividend yield offers a robust income stream, outpacing many traditional high-yield bond ETFs [3]. Second, the fund’s performance—5.70% year-to-date as of August 2025—exceeds its category average, underscoring its ability to generate capital appreciation amid sector-specific tailwinds [5]. This duality is critical in a rising rate environment, where investors must balance income preservation with growth potential.

The fund’s portfolio structure further enhances its appeal. By concentrating on below-investment-grade bonds, XHYT captures higher yields while maintaining diversification across TMT subsectors. For instance, CCO Holdings LLC/CCO Holdings Capital Corp. accounts for 9.37% of the fund’s assets, reflecting exposure to a diversified telecom services provider [1]. Such allocations mitigate sector concentration risk while leveraging the growth trajectories of individual companies.

Risks and Considerations

While XHYT’s strategy is compelling, investors must remain mindful of the inherent risks in high-yield bonds, including credit defaults and interest rate volatility. However, the TMT sectors’ focus on innovation and cost optimization provides a buffer against these risks. For example, telecom companies are prioritizing mergers and acquisitions to unlock value, while tech firms are navigating regulatory challenges through localized production strategies [1]. These adaptive measures enhance the creditworthiness of XHYT’s underlying holdings.

Conclusion

In a world where rising interest rates complicate traditional income strategies, the XHYT ETF offers a targeted approach to capturing high-yield dividends and sector-specific growth. By aligning with the TMT sectors’ reinvention through AI, digital transformation, and capital efficiency, XHYT positions investors to benefit from both income generation and long-term capital appreciation. As the global economy continues to recalibrate, strategic allocations like XHYT may prove essential for portfolios seeking resilience in uncertain times.

Source:
[1] 2025 global telecommunications outlook [https://www.deloitte.com/us/en/insights/industry/technology/technology-media-telecom-outlooks/telecommunications-industry-outlook-2025.html]
[2] 2025 technology industry outlook [https://www.deloitte.com/us/en/insights/industry/technology/technology-media-telecom-outlooks/technology-industry-outlook.html]
[3] XHYT ETF Stock Price & Overview [https://stockanalysis.com/etf/xhyt/]
[4] US Edition: Global Entertainment & Media Outlook [https://www.pwc.com/us/en/industries/tmt/library/global-entertainment-media-outlook.html]
[5] BondBloxx US High Yield Telecom Media Technology Sector ETF [https://finance.yahoo.com/quote/XHYT/]