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High-yield qualified dividend ETFs can be a great way to earn extra income from your investments. These funds focus on investing in high-dividend stocks and pass the dividend income on to shareholders, tax-free.
The benefits of high-yield qualified dividend ETFs are numerous, with some funds offering yields as high as 5% or more. This can be a game-changer for income investors looking to boost their returns.
Some popular high-yield qualified dividend ETFs include the iShares Core S&P U.S. Dividend Aristocrats ETF (NOBL) and the Vanguard High Dividend Yield ETF (VYM). These funds have consistently delivered strong dividend yields and have been popular among investors.
Investors should consider their individual financial goals and risk tolerance before investing in a high-yield qualified dividend ETF. By doing their research and selecting the right fund, they can potentially earn higher returns and achieve their financial objectives.
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Global X ETFs
The Global X SuperDividend ETF (SDIV) is a fund that tracks an index of 100 equally weighted companies that rank among the highest-dividend payers around the world.
This fund has a distribution yield of 10.91% over the past 12 months, which is a significant return on investment. It also has a net asset value of $787.14 million as of November 20, 2024.
The fund's expense ratio is 0.58%, which is relatively low compared to other investment options. The fund has a price of $21.61 as of November 20, 2024.
The fund's inception date is June 8, 2011, making it a relatively established investment option. It includes common stocks, real estate investment trusts (REITs), and master limited partnerships (MLPs) that meet certain criteria.
Some of the main holdings of the fund include Yue Yuen Industrial Hldg, Kinetik Holdings Inc, and HKBN Ltd.
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Invesco ETFs
Invesco offers a range of high-yield ETFs that cater to investors seeking dividend income. The Invesco KBW High Dividend Yield Financial ETF (KBWD) is one such fund that focuses on publicly held financial companies, which are likely to perform well in a rising interest rate environment.
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The fund is heavily weighted towards financial companies, with at least 90% of its holdings in this sector. This focus on financials is a key differentiator for KBWD, setting it apart from other high-yield ETFs.
One notable holding in KBWD is Trinity Capital Inc, a financial company that has been a part of the fund's portfolio since its inception in December 2010.
Here are some key facts about KBWD:
- Net Assets as of Nov. 20, 2024: $396 million
- Expense Ratio: 2.02%
- Distribution Yield (12 mo.): 12.05%
- Price as of Nov. 20, 2024: $15.08
Invesco S&P 500 Low Volatility Fund
The Invesco S&P 500 Low Volatility Fund offers a unique approach to investing in the stock market. It focuses on finding stocks that pay high dividends and have low volatility.
The fund is made up of a concentrated portfolio of consumer defense and utilities stocks. Altria Group Inc, Kinder Morgan Inc, and Bristol-Myers Squibb Co are just a few of the notable holdings.
One of the key benefits of this fund is its low expense ratio, coming in at just 0.30%. This means that investors can keep more of their returns.
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Here are some key statistics about the Invesco S&P 500 High Dividend Low Volatility ETF (SPHD):
The fund has been around since October 18, 2012, and has a long history of providing steady returns.
Invesco KBW Financial (KBWD)
The Invesco KBW Financial (KBWD) ETF is a great option for investors looking for a high dividend yield in a rising interest rate environment.
This ETF is heavily weighted towards publicly held financial companies, with at least 90% of its holdings in this sector.
KBWD's net assets as of November 20, 2024, were $396 million.
Its expense ratio is 2.02%, which is higher than some other ETFs.
The fund's distribution yield is 12.05%, which is a significant advantage for income-seeking investors.
KBWD's holdings include Trinity Capital Inc, BlackRock TCP Capital Corp, and FS KKR Capital Corp.
Here are some key statistics about KBWD's holdings:
- Trinity Capital Inc
- BlackRock TCP Capital Corp
- FS KKR Capital Corp
- Ares Commercial Real Estate Corp
- AGNC Investment Corp
The fund's price as of November 20, 2024, was $15.08.
KBWD was launched on December 2, 2010.
Top Holdings
The Invesco ETFs have some interesting top holdings. The Invesco S&P 500 High Dividend Low Volatility ETF (SPHD) has a concentration in consumer defense and utilities, with notable holdings including Altria Group Inc and Kinder Morgan Inc.
The Invesco KBW High Dividend Yield Financial ETF (KBWD) has a focus on financial companies, with holdings like Trinity Capital Inc and BlackRock TCP Capital Corp. Its top holdings are concentrated in the financial sector, which could be beneficial in a rising interest rate environment.
The WisdomTree U.S. Quality Dividend Growth Fund (DGRW) has a predominantly large-cap portfolio, with a significant weighting of tech stocks, including Microsoft (MSFT) and Apple (AAPL), which account for 6.8% and 5.2% of the portfolio's weight respectively.
Here are some of the top holdings of the Invesco ETFs:
Note that the top holdings of the Invesco ETFs are subject to change.
WisdomTree ETFs
WisdomTree ETFs are a great option for those seeking high-yield qualified dividend ETFs. They offer several funds that cater to different market needs.
The WisdomTree U.S. High Dividend Fund (DHS) has $1.21 billion in net assets and an expense ratio of 0.38%. This fund tracks the WisdomTree High Dividend Index, which features companies ranked by dividend yield.
Diversified holdings in DHS include real estate, healthcare, utilities, IT, and consumer staples sectors, with top holdings being Exxon Mobil Corp, Altria Group Inc, and AbbVie Inc. The fund's price as of Nov. 20, 2024, is $98.03.
For those looking to emerging markets, the WisdomTree Emerging Markets High Dividend Fund (DEM) is a good choice. It has $2.8 billion in assets under management and a dividend yield of 5.4%.
DEM tracks the WisdomTree Emerging Markets High Dividend Index, which selects the highest 30% of companies ranked by dividend yield and weights them by annual cash dividends paid. The fund holds 503 emerging market stocks, primarily large cap, with a top holding of 3.9% in China Construction Bank.
Here are some key statistics for DEM:
WisdomTree U.S. Fund
The WisdomTree U.S. Fund is a great option for those looking for a diversified portfolio with a high dividend yield. It has a net asset value of $1.21 billion as of November 20, 2024.
The fund's expense ratio is a relatively low 0.38%, which can help investors save on costs. This is especially important for long-term investors who want to minimize fees.
The fund's distribution yield is 2.57% over the past 12 months, making it an attractive option for income-seeking investors. This yield is higher than many other funds, providing a steady stream of income.
The fund's inception date is June 16, 2006, and it has a price of $98.03 as of November 20, 2024. This gives investors a clear understanding of the fund's history and current value.
The fund's top holdings include Exxon Mobil Corp, Altria Group Inc, AbbVie Inc, Chevron Corp, and International Business Machines Corp. These companies are well-established and have a history of paying consistent dividends.
Here are the fund's top holdings:
- Exxon Mobil Corp
- Altria Group Inc
- AbbVie Inc
- Chevron Corp
- International Business Machines Corp
WisdomTree U.S. Quality Growth Fund
The WisdomTree U.S. Quality Dividend Growth Fund is a large blend fund with $15.2 billion in assets under management.
It has a dividend yield of 1.5% and expenses of 0.28%. The fund invests in the 300 stocks with the best combined rank of growth and quality factors.
Growth is determined by long-term earnings growth estimates, while quality is based on three-year averages for return on equity (RoE) and return on assets (RoA).
The fund is predominantly large-cap, with tech making up 30.3% of its assets. The top 10 holdings account for over 36.7% of the portfolio's weight.
Microsoft and Apple are the fund's top holdings, making up 6.8% and 5.2% of the portfolio, respectively.
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WisdomTree Emerging Markets Fund
The WisdomTree Emerging Markets Fund is a unique option for investors looking for high yields. It taps into emerging markets for high dividend yields, which can be really attractive for those seeking regular income.
This fund, WisdomTree Emerging Markets High Dividend Fund (DEM), has $2.8 billion in assets under management. Its dividend yield is a whopping 5.4%.
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DEM tracks the WisdomTree Emerging Markets High Dividend Index, which selects stocks based on their dividend yield. Specifically, it takes the top 30% of stocks ranked by dividend yield and weights them by annual cash dividends paid. This results in a wide portfolio of 503 emerging market stocks.
The fund has a good mix of large-cap, mid-cap, and small-cap stocks, with 61.6% of its holdings in large-cap stocks. Its top holding is China Construction Bank, which makes up 3.9% of the fund's assets.
Here's a breakdown of the fund's geographic representation:
- China: 19.5%
- Taiwan: 17.0%
- Brazil: 11.0%
Keep in mind that the dividends from these emerging market stocks can be less consistent than those from U.S. stocks. Some of the fund's biggest dividend payers, like Petroleo Brasileiro and Vale, have variable dividends.
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Other Funds
If you're looking for other funds that offer high yields, there are several options available.
The Vanguard Dividend Appreciation ETF (VIG) is one such fund that tends to have above-average distribution yields.
The Fidelity International High Dividend ETF (FIDI) is another popular choice.
Other notable funds include the iShares Core High Dividend ETF (HDV) and the SPDR S&P Global Dividend ETF (WDIV).
The Schwab U.S. Dividend Equity ETF (SCHD) is also worth considering.
Here are some of the most popular high-yielding dividend ETFs:
- Vanguard Dividend Appreciation ETF (VIG)
- Fidelity International High Dividend ETF (FIDI)
- iShares Core High Dividend ETF (HDV)
- SPDR S&P Global Dividend ETF (WDIV)
- Schwab U.S. Dividend Equity ETF (SCHD)
Performance and Fees
The fund's performance is impressive, with a 1-year return of 19.03% and a 5-year annualized return of 13.92%.
Past performance is no guarantee of future results, but it's a good starting point for evaluating the fund's potential.
The fund's fees are relatively low, with an expense ratio of 0.08%. This means that for every dollar invested, 0.08 cents go towards administrative costs.
Management fees account for the majority of the expense ratio, at 0.08%.
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Fund Performance
Let's take a closer look at the fund's performance. The one-month return is -1.83%, which is the same as the market performance. This means that the fund's value decreased by 1.83% in the past month.
The three-month return is 2.19%, which is higher than the market performance. This is a positive sign, indicating that the fund has outperformed the market in the past quarter.
Here's a breakdown of the fund's performance over different time periods:
As you can see, the fund's performance varies depending on the time period. However, it's essential to remember that past performance is no guarantee of future results.
Fees
Fees can be a major consideration when it comes to investing in a fund. The management fee for this fund is 0.08%.
The management fee is a significant expense, as it takes a direct cut from the fund's returns. This fee is 0.08% of the fund's assets.
Other expenses, such as Acquired Fund Fees and Expenses, are also factored into the overall expense ratio. Fortunately, these fees are currently at 0.00%.
The expense ratio is a key metric to consider when evaluating a fund's fees. For this fund, it's also 0.08%.
Here's a breakdown of the fund's fees:
30-Day SEC Yield
The 30-Day SEC Yield is a crucial metric to consider when evaluating the performance of a dividend ETF. It's a standard measure of a fund's dividend income, expressed as a percentage of its net asset value.
The YieldMax MRNA Option Income Strategy ETF, for instance, boasts an impressive 30-Day SEC Yield of 181.81% as of November 2024. That's significantly higher than most other dividend ETFs.
Some other high-yielding dividend ETFs, like the Vanguard Dividend Appreciation ETF (VIG), Fidelity International High Dividend ETF (FIDI), iShares Core High Dividend ETF (HDV), SPDR S&P Global Dividend ETF (WDIV), and Schwab U.S. Dividend Equity ETF (SCHD), may not have such a high SEC Yield, but they still offer attractive distribution yields.
Here's a brief look at the 30-Day SEC Yield for some of these popular dividend ETFs:
Note that the 30-Day SEC Yield is not specified for these ETFs in the provided article sections.
Pricing Information
Let's break down the pricing information for a better understanding of how it affects your investments.
The net asset value (NAV) price of the investment is $51.21, which is a significant figure to keep in mind.
The daily change in NAV price is $0.50, representing a 0.98% increase.
This means that if you invested $1,000 in the fund, your investment would be worth $1,000.50 at the end of the day.
The closing market price is $51.23, which is slightly higher than the NAV price.
The daily change in market price is $0.47, representing a 0.93% increase.
This indicates that the market price is also increasing, but at a slower rate than the NAV price.
Here's a summary of the premium/discount information:
Investment Details
The iShares International Select Dividend ETF (IDV) is a top choice for investors seeking high-yield qualified dividends. It has a substantial assets under management of $4.1 billion.
The ETF's portfolio is made up of around 100 stocks, including well-established large-cap income players like British American Tobacco (BTI) and Vodafone Group (VOD).
These companies offer significantly higher dividend yields than their domestic peers, with a dividend yield of 6.1% for the IDV ETF.
Schwab US Equity
The Schwab US Dividend Equity ETF is a low-cost option for buy-and-hold investors. It has $57.3 billion in assets under management.
Its expense ratio of 0.06% translates into just $6 per year on a $10,000 investment. This makes it one of the lowest expense ratios among dividend ETFs.
The fund follows the Dow Jones U.S. Dividend 100 Index, which tracks 100 high-yielding stocks. These stocks have paid dividends for at least 10 consecutive years and have quality filters such as cash flow to total debt and return on equity.
The fund has a weighted average market capitalization of its holdings of about $134.3 billion, which is well into mega-cap status. This means the fund is invested in large-cap stocks.
The top holdings of the fund include Lockheed Martin, AbbVie, and Home Depot. These stocks help deliver a dividend yield of 3.3%, which is nearly triple the S&P 500's yield at present.
Here are the sectors where the fund is distributed:
- Financial services: 18.2%
- Healthcare: 15.8%
- Consumer defensive: 14.0%
- Other sectors: 52.0%
The fund excludes real estate investment trusts (REITs) and master limited partnerships (MLPs).
Vanguard Yield
The Vanguard Yield is a popular choice among investors, and for good reason. It's a low-cost option with a 0.06% expense ratio, which is even lower than some of the other ETFs mentioned.
The Vanguard High Dividend Yield ETF (VYM) tracks the FTSE High Dividend Yield Index, which is made up of above-average-yielding stocks. This means that investors can expect a higher dividend yield from VYM compared to other ETFs.
One of the key features of VYM is its large portfolio of 535 dividend payers, with a median market cap of $142.2 billion. This provides a level of diversification that can help reduce risk.
The top holdings in VYM include well-known dividend blue chip stocks such as Exxon Mobil (XOM), Johnson & Johnson (JNJ), and Procter & Gamble (PG). These companies are known for their consistent dividend payments and have a history of sharing their profits with shareholders.
If you're looking for a high-yield ETF, VYM might be a good choice. However, it's worth noting that the dividend yield is currently 2.7%, which is lower than some of the other ETFs mentioned.
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Here's a comparison of the top holdings in VYM with some of the other ETFs mentioned:
As you can see, VYM has a more diverse portfolio of top holdings compared to some of the other ETFs mentioned. However, the dividend yield is lower, so it's worth considering your investment goals and risk tolerance before making a decision.
Vanguard International Appreciation
Vanguard International Dividend Appreciation ETF is a great option for investors looking to diversify their portfolios with international stocks. It tracks the S&P Global Ex-U.S. Dividend Growers Index, which selects companies that have improved their dividends for at least seven consecutive years.
The ETF has a significant presence of large-cap stocks, with around 85% of its assets dedicated to bigger companies. This is a notable feature, as it suggests that VIGI is a more stable investment option.
VIGI's portfolio has roughly 355 holdings, with a tilt towards developed Europe (48.3%), Pacific (30%), and North America (12.6%). This diversification is a key benefit, as it reduces the risk associated with any single stock or market.
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Here are some key statistics about VIGI:
- Type: Foreign large growth
- Assets under management: $7.2 billion
- Dividend yield: 2.0%
- Expenses: 0.15%
VIGI's emphasis on dividend growth rather than high yielders is a notable feature, as it suggests that the ETF is focused on long-term performance rather than short-term gains. This is in line with the comments made by Morningstar director Bryan Armour, who noted that VIGI effectively captures high-quality firms with consistent dividend growth.
Growth of $10,000 Since Inception
The growth of your investment is a crucial aspect to consider.
A hypothetical investment of $10,000 has shown significant growth over time.
The chart reflecting this growth assumes reinvestment of dividends and capital gains, which is a common practice in investing.
Fund expenses, including management fees and other expenses, have been deducted from the investment, giving a more accurate picture of the returns.
Data as of January 6, 2025, provides the most up-to-date information on the investment's performance.
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Frequently Asked Questions
Does Vanguard High dividend yield ETF pay dividends?
Yes, Vanguard High Dividend Yield ETF (VYM) pays dividends, with a history of regular payments.
Sources
- https://www.investopedia.com/investing/monthly-dividend-etfs/
- https://neosfunds.com/spyi/
- https://www.ishares.com/us/products/239563/ishares-high-dividend-etf
- https://www.kiplinger.com/investing/etfs/602375/high-yield-etfs-for-income-investors
- https://www.kiplinger.com/investing/etfs/603435/best-dividend-etfs-to-buy-for-a-diversified-portfolio
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