One of the best ways to keep your portfolio safe and generate passive income is with high-yield exchange-traded funds (ETFs). For one, these ETFs and their holdings can help smooth out the volatile ride when markets drop. Two, they offer exposure to a diversified portfolio of respected companies that have a history of paying dividends, which can provide a steady stream of income. In addition, dividend ETFs offer solid diversification, low expense ratios and tax efficiency.
Look at the Global X Super Dividend U.S. ETF (NYSEARCA: DIV), for example.
With an expense ratio of 0.45% and a monthly dividend yield of 7.64%, the DIV ETF provides access to 50 of the highest-yielding stocks in the U.S. Since testing $5 in 2020, the DIV ETF is now up to $33. From here, we’d like to see it retest its 2014 high of about $86.32 over the long haul.
Other hot high-yield dividend-paying ETFs include the following five funds:
JPMorgan Nasdaq Equity Premium Equity Income ETF
There’s also the JPMorgan Nasdaq Equity Premium Equity Income ETF (NASDAQ: JEPQ).
With an expense ratio of 0.35%, the JEPQ ETF carries a monthly yield of 9.96%. It also generates income by selling options and by investing in U.S. large-cap growth stocks. All of which allows it to deliver a monthly income stream through options premiums and stock dividends. Even better, investors have also benefited from the ETF’s appreciation.
Some of its 107 holdings include the entire Magnificent Seven, Broadcom (NASDAQ: AVGO), Netflix (NASDAQ: NFLX), and Costco (NASDAQ: COST), to name just a few.
Last trading at $55.85, we’d like to see the JEPQ ETF rally to $65 next. Since bottoming out at around $30 in late 2022, it just hit an all-time high of $55.87.
SPDR Portfolio S&P 500 High Dividend ETF
With an expense ratio of 0.07% and a yield of just under 4.6%, the SPDR Portfolio S&P 500 High Dividend ETF (NYSEARCA: SPYD) tracks the total return performance of the S&P 500 High Dividend Index, which is designed to measure the performance of the top 80 high dividend stocks on the S&P 500. At the moment, it has 80 holdings.
Some of its top holdings include CVS Health Group (NYSE: CVS), Consolidated Edison (NYSE: ED), Philip Morris (NYSE: PM), AT&T (NYSE: T), Exelon Corp. (NYSE: EXC), Verizon (NYSE: VZ) and Altria Group (NYSE: MO), to name just a few.
Since bottoming out at around $30.84 in 2023, the ETF is now up to $43.71. From here, we’d like to see it initially retest its prior high of $44.82.
Fidelity High Dividend ETF
We can also look at the Fidelity High Dividend ETF (NYSEARCA: FDVV).
With an expense ratio of 0.16% and a yield of 3.04%the FDVV ETF tracks the Fidelity High Dividend Index, which is designed to reflect the performance of stocks of large- and mid-capitalization dividend-paying companies that are expected to continue to pay and grow their dividends.
Some of its 107 holdings include Apple (NASDAQ: AAPL), Microsoft (NASDAQ: MSFT), NVIDIA (NASDAQ: NVDA), JPMorgan Chase (NYSE: JPM), Visa (NYSE: V), Exxon Mobil (NYSE: XOM), Philip Morris and Procter & Gamble (NYSE: PG), to name a few.
Since bottoming out at around $43 in April, the FDVV ETF raced to a recent high of $54.73. From here, we’d like to see it initially test $60 a share.
iShares Core High Dividend ETF
There’s also the iShares Core High Dividend ETF (NYSE: HDV).
With an expense ratio of 0.08% and a yield of 3.41%, the HDV ETF tracks the investment results of an index composed of relatively high dividend-paying U.S. equities. Some of its 75 holdings include Exxon Mobil, Johnson & Johnson (NYSE: JNJ), Progressive Corp. (NYSE: PGR), Chevron (NYSE: CVX), AbbVie (NYSE: ABBV), Philip Morris, AT&T and Coca-Cola (NYSE: KO), to name just a few.
Since bottoming out at around $105.19 in April, the HDV ETF rallied to a recent high of $121.67. Now at $120.85, we’d like to see the ETF rally to $140 next.
While we wait, we can collect its yield. The ETF last paid a dividend of just over 93 cents on June 20. Before that, it paid a dividend of just over 79 cents on May 21.
JPMorgan Equity Premium Income Fund
Another solid dividend ETF is the JPMorgan Equity Premium Income Fund (NYSEARCA: JEPI).
With an expense ratio of 0.35% and a yield of 8.38%, the ETF generates income through stock dividends and options premiums.
Some of its 126 holdings include Progressive Corp., Visa, Mastercard (NYSE: MA), Southern Company (NYSE: SO), UnitedHealth Group (NYSE: UNH), Trane Technologies (NYSE: TT), AbbVie and Amazon (NASDAQ: AMZN), to name just a few. Since bottoming out at around $48.37 in April, the JEPI ETF raced back to $56.76. From here, we’d like to see it rally to $65 a share over the long haul.
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