Passive income is a dream for many investors, and high-yield dividend ETFs offer a reliable way to achieve this goal. These funds provide a steady stream of cash flow while also offering diversification and potentially lower volatility compared to individual stocks. In this article, we will explore some of the best high-yield dividend ETFs available in the market, as well as alternative investment options for those looking to boost their passive income.
One of the most reliable options for income-focused investors is the Schwab U.S. Dividend Equity ETF (SCHD). This ETF focuses on high-dividend-yielding U.S. stocks, with a trailing 12-month yield of 3.43% and a 10-year annualized return of 10.84%. Top holdings in SCHD include companies like Lockheed Martin, AbbVie, and Home Depot, providing a balanced blend of stability and profitability.
Another solid choice is the Vanguard High Dividend Yield ETF (VYM), which tracks the FTSE High Dividend Yield Index and focuses on stocks with above-average dividend yields. With a trailing 12-month yield of 2.87% and a 10-year annualized total return of 10.07%, VYM has consistently provided investors with reliable income and capital appreciation.
For those seeking a higher-risk, ultra high-yield option, the Global X SuperDividend ETF (SDIV) offers a compelling opportunity. This ETF targets the highest-yielding dividend stocks globally, with a trailing 12-month yield of 10.72%. However, the ETF’s 10-year total return of -3.60% reflects the significant risks involved, making it suitable for investors with a higher risk tolerance.
In addition to high-yield dividend ETFs, investors may also want to explore alternative investment options for potentially higher returns. Yieldstreet is a platform that offers access to a diverse range of asset classes, including real estate, art, and legal finance, with yields between 7% and 12%. Groundfloor, on the other hand, is a real estate crowdfunding platform focused on short-term, high-yield real estate debt investments, aiming to offer returns between 8% and 15%.
Overall, high-yield dividend ETFs can be a powerful tool for building a reliable stream of passive income. The reliable ETFs mentioned above offer a balanced mix of income and stability, while the Global X SuperDividend ETF presents a riskier, potentially higher-yielding option. Alternative platforms like Yieldstreet and Groundfloor provide intriguing opportunities for investors willing to explore beyond traditional dividend-paying assets. It’s essential to consider your risk tolerance and investment goals when selecting the best options for your portfolio.
