High-Yield Dividend ETFs We Love Right Now

Barchart · 2d ago

If you want to collect a substantial income, high-yield dividend exchange-traded funds (ETFs) can provide you with some protection relative to owning generous individual payers.

High-yield dividend ETFs are funds that (quelle surprise!) pay greater-than-average distributions as measured by yield. They typically accomplish this while either investing broadly across the market or targeting certain sectors or geographies, though occasionally they use a few special market mechanics to deliver high dividends.

And one of the immediate ways they help you tamp down on risk is by investing your money in not just one or two stocks, but across dozens, hundreds, even thousands. That diversification insulates you from the possibility of a single stock's implosion cracking your nest egg wide open.

Let's look at three of the best high-yield dividend ETFs you can buy. These funds currently pay between 5.8% and 8.4% annually.

Editor's Note: This article's tabular data is up-to-date as of Oct. 9, 2026.

Disclaimer: This article does not constitute individualized investment advice. Individual securities, funds, and/or other investments appear for your consideration and not as personalized investment recommendations. Act at your own discretion.

How Were These High-Yield Dividend ETFs Selected?

First, these are dividend ETFs. In other words, this list is limited to funds that own stocks; bond funds don't apply.

Next is the yield floor. There's no universal definition of "high yield"; much like beauty, a high dividend is in the eye of the beholder. But given that it's a list of high-dividend ETFs, I have to set the floor somewhere, and that somewhere is 3.5%. That ensures you'll earn well more than double (and in most cases, many times more) what you'd collect by investing in an S&P 500 index fund.

Lastly, as a quality check, I've only included dividend ETFs that have earned a Morningstar Medalist rating—Morningstar's forward-looking analytical view of the fund—of at least Bronze. A quick explanation of why that matters, per Morningstar:

"For actively managed funds, the top three ratings of Gold, Silver, and Bronze all indicate that our analysts expect the rated investment vehicle to produce positive alpha relative to its Morningstar Category index over the long term, meaning a period of at least five years. For passive strategies, the same ratings indicate that we expect the fund to deliver alpha relative to its Morningstar Category index that is above the lesser of the category median or zero over the long term."

Importantly, a Medalist rating doesn't mean Morningstar is necessarily bullish on the underlying asset class or categorization. It's merely an expression of confidence in the fund compared to its peers.

From the remaining universe of ETFs to choose from, I picked ETFs from a variety of sectors, geographies, and strategies. I also selected funds that have reasonable expense ratios—given their specialties, many of these cost more than a bland broad-market ETF, but they're fair or low for their category.

An Important Note About Dividend ETFs' Distributions

One last thing to know before diving into any dividend ETF: Their distributions tend to reflect the cash dividend payments of their underlying holdings.

What you're getting from an ETF in a quarter is more or less your share of all the dividends that all of the holdings made within that quarter. But sometimes, individual components don't always pay within each given quarter (even if they pay quarterly). Also, they occasionally increase regular dividends, make special payouts, or cut or even suspend regular dividends.

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As a result, ETFs can have "lumpy" distributions that change from one quarter to the next.

Here's an example: In a 12-month period, the SPDR S&P 500 ETF Trust (SPY)—the largest ETF by assets on the planet, and thus one of the most commonly owned—paid out quarterly dividends of $1.90, $1.80, $1.99, and $1.83 per share. That's a 10% difference between the smallest and largest payouts, and some years, it's much more.

If you've not yet reached retirement, this inconsistency probably won't matter to you at all. But it could be problematic—or at the least, worth planning around—if you are in retirement and heavily depend on dividend income to pay your regular bills. So especially if you're in the latter boat, when you research dividend funds, I highly suggest not just looking at yield, but at distribution history, too.

The Best High-Yield Dividend ETFs

Without further ado, let's look at a trio of the best high-yield dividend ETFs on the market right now.

Each fund is shown with current dividend yield and expense data, as well as its Morningstar Medalist rating. In no particular order …

iShares International Select Dividend ETF

Assets under management: $8.2 billion
Dividend yield: 5.8%
Expense ratio: 0.50%, or $5.00 per year on every $1,000 invested
Morningstar Medalist rating: Silver

The iShares International Select Dividend ETF (IDV) is a straightforward basket of overseas stocks. It's another index fund—one that doesn't care about volatility, just relatively high payments.

IDV's 100-stock portfolio is a roughly 70/25/5 blend of large-, mid-, and small-cap stocks from across the developed world, predominantly Europe. The U.K., France, Spain, and Italy all merit double-digit weights at the moment. There's not much emerging-market exposure, and what's there is in relatively larger and developed EMs: namely, South Korea and China.

While the portfolio does have quite a few multinationals that are well-known here in the States, the top weights are reserved for the likes of French integrated giant TotalEnergies (TTE), Italian utility Enel (ENLAY), and Spanish telecommunications firm Telefónica (TEF). And collectively, this portfolio puts out a monster yield of almost 6%.

The 0.5% annual fee isn't exactly low in a bubble, but it's within the cheapest quintile across its Morningstar category (Foreign Large Value), so you're getting a relatively cheap fund.

InfraCap MLP ETF

Assets under management: $469.6 million
Dividend yield: 8.4%
Expense ratio: 1.72%*, or $17.20 per year on every $1,000 invested
Morningstar Medalist rating: Silver

Master limited partnerships aren’t a type of energy company—they’re an overall business structure that’s applicable to numerous industries. They’re considered “pass-through entities” because income isn’t taxed at the corporate level—it’s “passed through” to owners and “unitholders” (the MLP equivalent of shareholders) via “distributions” (the MLP equivalent of dividends).

However, many publicly traded MLPs are energy-related. These companies are typically involved in energy infrastructure—that means pipelines, storage, terminals, and other assets involved in the transportation and holding of oil, gas, and other energy commodities. They also happen to be among the market's higher yielders; while they don't necessarily have a mandate for distributions the way real estate investment trusts (REITs) do, they often distribute most if not all of their available cash flows.

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The InfraCap MLP ETF (AMZA) is an actively managed ETF that owns a small grouping of MLPs. Managers Jay Hatfield and Andrew Meleney have put together a portfolio of just around 25 infrastructure names, and it's currently hyper-concentrated in six stocks: Energy Transfer LP (ET), Sunoco LP (SUN), Plains All American Pipeline LP (PAA), Western Midstream Partners LP (WES), MPLX LP (MPLX), and Enterprise Products Partners LP (EPD) currently account for 75% of the fund's assets.

Importantly: MLP distributions are primarily made up of tax-deferred return of capital, with the remainder typically considered ordinary income. MLPs even require an additional form—the K-1—come tax time. However, InfraCap's fund is structured as a C corporation, and instead issues a Form 1099-DIV, which allows investors to avoid the more complex K-1, simplifying tax reporting.

AMZA is also a rarity in that it's a monthly dividend payer (most equity dividend ETFs pay quarterly).

* AMZA's management fee is 0.95%. Additional fees are typically attributed to "income tax expenses,” which are an estimate of the potential tax expense (or benefit) that would occur if the fund recognized any unrealized gains or losses in the portfolio. This is common among funds that hold MLPs. This can vary widely from year to year and even day to day.

JPMorgan Equity Premium Income ETF

Assets under management: $45.6 billion
Dividend yield: 8.2%
Expense ratio: 0.35%, or $3.50 per year on every $1,000 invested
Morningstar Medalist rating: Gold

While most high-dividend ETFs deliver big income by simply owning high-yield dividend stocks, a few funds go about it from a different angle, using options and other market mechanics to generate yield instead.

Take the JPMorgan Equity Premium Income ETF (JEPI), for instance.

At a glance, JEPI's 136 portfolio holdings wouldn't make you blink an eye. It's a 70/30 split of large- and mid-cap stocks—not too far removed from what you'd find in an S&P 500 index tracker. Positions such as Microsoft (MSFT), Nvidia (NVDA), and Apple (AAPL). And that fund would likely yield somewhere in the 1%-2% range.

But JEPI delivers a sweet yield of more than 8% right now.

That's because JEPI doesn't merely hold these stocks. It also engages in selling covered calls—a type of options trading that's designed to generate income using stocks you already own. Managers Hamilton Reiner, Raffaele Zingone, Matt Bensen, and Judy Jansen write approximately 2% out-of-the-money call options on the S&P 500 Index. "It's a quarter every week," says Jon Maier, Chief ETF Strategist, Managing Director, JPMorgan Asset Management. "A quarter of the portfolio is rewritten for a month, and then a week later, a month. So it's staggered."

The downside to this strategy: You can limit your upside in your underlying holdings. The upside? You can reduce volatility and reap healthy dividend payments. With JEPI specifically, "the underlying portfolio is managed with lower volatility than the S&P 500. So when you have the option overlay, combined with the underlying lower-volatility portfolio, it provides volatility that's about 60% of the S&P 500 and yields between 7% and 9%," Maier says.

It's rare that an options-trading strategy earns a Morningstar Medalist rating. Morningstar analyst Lan Anh Tran's reason behind JEPI's Gold award? "JPMorgan Equity Premium Income takes a nuanced approach to covered calls that delivers high income while reducing downside risk. This fund’s incremental improvements on a basic covered-call strategy make it a solid option in the derivative income Morningstar Category."

Just understand that the "income" from covered calls isn't the same as the dividend income generated by all of the other funds listed here. Options income is taxed as capital gains—usually the short-term variety, which receives less favorable treatment, as it's taxed at your marginal income rate.

Learn More About These and Other Funds With Morningstar Investor

If you're buying a fund you plan on holding for years (if not forever), you want to know you're making the right selection. And Morningstar Investor can help you do that.

Morningstar Investor provides a wealth of information and comparable data points about mutual funds and ETFs—fees, risk, portfolio composition, performance, distributions, and more. Morningstar experts also provide detailed explanations and analysis of many of the funds the site covers.

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