Passive income is a dream for many investors, allowing them to sit back and watch their money grow without actively managing their investments. One popular source of passive income is exchange-traded funds (ETFs), which offer a convenient way to invest in a diversified portfolio of assets. In this article, we will explore three high-yield dividend ETFs that can help investors generate regular income.
The first ETF on our list is the Invesco S&P SmallCap High Dividend Low Volatility ETF (XSHD). This ETF focuses on small-cap stocks with high dividend yields and low volatility. With a 30-day SEC yield of 7.72%, the XSHD ETF offers investors an attractive income stream. Despite its strong income potential, the fund has not performed well historically, with an average annual return of -1.17% since its inception in December 2016.
Next up is the JPMorgan Equity Premium Income ETF (JEPI), managed by JPMorgan Chase. This ETF uses a proprietary process to select stocks with less volatility and sells out-of-the-money S&P 500 index call options to generate income. With a 30-day SEC yield of 7.55%, the JEPI ETF offers investors a competitive income stream. The fund has a relatively short track record, with an average annual return of 12.57% since its inception in May 2020.
Finally, we have the SPDR Portfolio S&P 500 High Dividend ETF (SPYD), managed by State Street. This ETF invests in stocks in the S&P 500 index with high dividend yields and offers a 30-day SEC yield of 4.68%. With a low annual expense ratio of 0.07% and a solid track record of positive returns, the SPYD ETF is a popular choice for investors seeking passive income. Unlike the other ETFs mentioned, the SPYD ETF pays distributions quarterly instead of monthly.
In conclusion, exchange-traded funds can be a great source of passive income for investors looking to generate regular cash flow. The three high-yield dividend ETFs mentioned in this article offer attractive income potential and the convenience of passive investing. Whether you prefer small-cap stocks, equity premium income strategies, or high dividend yields from the S&P 500 index, there is an ETF out there to suit your income needs. Consider adding these ETFs to your investment portfolio to keep the income flowing in regularly.
