What is the highest yielding ETF?
The Invesco S&P 500 High Dividend Low Volatility ETF has a 4.74% dividend yield, the highest among our recommendations, but its risk is average. Meanwhile, the iShares Core High Dividend ETF has a 4.09% dividend yield but an expense ratio of only 0.08%, much lower than the 0.3% ratio for the Invesco fund.
| Symbol | Name | 5-Year Return |
|---|---|---|
| XNTK | SPDR NYSE Technology ETF | 18.58% |
| UPRO | ProShares UltraPro S&P500 | 18.52% |
| PTF | Invesco Dorsey Wright Technology Momentum ETF | 18.33% |
| QQQ | Invesco QQQ Trust Series I | 18.27% |
The Invesco S&P 500 High Dividend Low Volatility ETF has a 4.74% dividend yield, the highest among our recommendations, but its risk is average. Meanwhile, the iShares Core High Dividend ETF has a 4.09% dividend yield but an expense ratio of only 0.08%, much lower than the 0.3% ratio for the Invesco fund.
| Ticker | Name | Annual dividend yield |
|---|---|---|
| RDIV | Invesco S&P Ultra Dividend Revenue ETF | 4.87% |
| SPYD | SPDR Portfolio S&P 500 High Dividend ETF | 4.49% |
| FDL | First Trust Morningstar Dividend Leaders Index Fund | 4.36% |
| DJD | Invesco Dow Jones Industrial Average Dividend ETF | 4.25% |
Horizons ETFs' High Interest Savings ETFs, also known as Cash ETFs, are a modern approach to achieving cash exposure in your investment portfolio.
| Symbol | Name | Dividend Yield |
|---|---|---|
| XRMI | Global X S&P 500 Risk Managed Income ETF | 12.41% |
| YYY | Amplify High Income ETF | 12.33% |
| SPYI | NEOS S&P 500 High Income ETF | 12.02% |
| TUGN | STF Tactical Growth & Income ETF | 11.99% |
The Vanguard Growth ETF has outperformed the S&P 500 over most time periods, including a 10-year annualized return of 14.7% vs. 12.5% for the S&P 500.
While dividend ETFs can offer stable income, their growth potential is generally lower over the long run. That said, dividend ETFs may outperform the S&P 500 during particular time frames, such as during a recession or a period of easing interest rates.
Experts agree that for most personal investors, a portfolio comprising 5 to 10 ETFs is perfect in terms of diversification.
Is there a dividend king ETF? There is no “king” of dividend ETFs, per se. To qualify as a dividend king, a stock must have increased its dividends consecutively for at least the past 50 years.
What is the best ETF for passive income?
That's why many income-seeking investors prefer an exchange-traded fund (ETF) that targets dividend stocks. You can achieve passive income and wide diversification with just one purchase. An excellent example is the Vanguard High Dividend Yield ETF (VYM -0.20%).
One metric that investors often look to is trailing one-month performance. The top ETFs for equities, bonds, fixed income, commodities, and currencies for April 2024 based on this metric include CRPT, FCVT, EMHY, DBA, and UUP.
Stock-picking offers an advantage over exchange-traded funds (ETFs) when there is a wide dispersion of returns from the mean. Exchange-traded funds (ETFs) offer advantages over stocks when the return from stocks in the sector has a narrow dispersion around the mean.
As most ETFs now trade commission-free and can be bought and sold multiple times throughout the day, they are less likely to be used as buy-and-hold vehicles. Because of his cautionary tone, Ramsey sometimes gets painted with the “anti-ETF” brush. But to be clear, Ramsey's all in favor of using ETFs when used properly.
Investing in dividend ETFs. Dividend ETFs are another option for investors to seek consistent income. A dividend stock aims to pay a portion of the company's earnings to its shareholders on a regular basis, typically quarterly. Dividends are usually distributed as cash or additional shares of stock.
You expose your portfolio to much higher risk with sector ETFs, so you should use them sparingly, but investing 5% to 10% of your total portfolio assets may be appropriate. If you want to be highly conservative, don't use these at all.
Global X Nasdaq 100 Covered Call ETF (QYLD)
All of the Global X covered call ETFs pay dividends monthly. Since it uses a 100% option overlay strategy, QYLD maximizes yield, but offers very little share price upside potential.
As with stocks and many mutual funds, most ETFs pay their dividends quarterly—once every three months. However, ETFs that offer monthly dividend returns are also available.
| Exchange-traded fund (ticker) | Assets under management | Expenses |
|---|---|---|
| Vanguard Dividend Appreciation ETF (VIG) | $78.2 billion | 0.06% |
| Vanguard U.S. Quality Factor ETF (VFQY) | $324.3 million | 0.13% |
| SPDR Gold MiniShares (GLDM) | $6.8 billion | 0.10% |
| iShares 1-3 Year Treasury Bond ETF (SHY) | $24.8 billion | 0.15% |
In the past year, SPY returned a total of 21.88%, which is slightly higher than VOO's 21.42% return. Over the past 10 years, SPY has had annualized average returns of 12.23% , compared to 12.29% for VOO. These numbers are adjusted for stock splits and include dividends.
What ETF has the highest 10-year return?
- 10-year return: 24.37%
- Assets under management: $10.9B.
- Expense ratio: 0.35%
- As of date: November 30, 2023.
VTI is a total U.S. market fund and holds more than 3,500 stocks. VTI is better diversified and benefits from small and mid-cap stocks that grow into large caps. VOO is less diversified, tracking the performance of the S&P 500 Index. VOO excludes small and mid-cap stocks.
Cons. No guarantee of future dividends. Stock price declines may offset yield. Dividends are taxed in the year they are distributed to shareholders.
For instance, some ETFs may come with fees, others might stray from the value of the underlying asset, ETFs are not always optimized for taxes, and of course — like any investment — ETFs also come with risk.
Dividend ETFs or Dividend Stocks: Which Is Better? Dividend ETFs can be a good option for investors looking for a low-cost, diversified and reliable source of income from their investments. Dividend stocks may be a better option for investors who prefer to choose their own investments.
