3 ETFs with Dividend Yields of 12% or Higher for Your Income Portfolio
Exchange-traded fund (ETF) inflows hit a record $1.9 trillion in 2024, pushing total ETF assets to $14.7 trillion.
However, with 10-year U.S. Treasury yields hovering near 4.4%, income-hungry investors face a situation in which traditional ETFs struggle to compete. This has prompted a shift toward innovative strategies aimed at securing higher yields.
Warren Buffett Famously Warned to 'Make Money While You Sleep' or 'You Will Work Until You Die': 5 Stocks To Invest Like Buffett
3 ETFs with Dividend Yields of 12% or Higher for Your Income Portfolio
Our exclusive Barchart Brief newsletter is your FREE midday guide to what's moving stocks, sectors, and investor sentiment - delivered right when you need the info most. Subscribe today!
Three notable funds are reshaping the income investing landscape by offering yields that far exceed conventional alternatives. Each one uses advanced covered call strategies on major indexes, turning volatile markets into reliable monthly income streams.
The Global X Nasdaq 100 Covered Call ETF (QYLD) tracks the CBOE NASDAQ-100 BuyWrite V2 Index. With assets under management reaching $8.38 billion, QYLD's annual distribution rate sits at 14.13%, paying out distributions monthly.
The fund maintains positions in all stocks in the Nasdaq 100 Index ($IUXX) and simultaneously sells call options on the index, effectively covering 100% of its portfolio. This strategy is aimed at collecting option premiums, which are distributed monthly. While this delivers a robust income stream, the tradeoff comes in the form of capped upside during sharp rallies.
The fund's expense ratio is 0.6%, which is competitive given the complexity of its options strategy and the steady cash flow it aims to provide. The ETF is down 8.7% in the year to date and is down 6.7% over the past year.
The NEOS S&P 500 High Income ETF (SPYI) is a product of NEOS Funds and began trading on Aug. 31, 2022. The ETF also pays out monthly distributions and has a 12-month distribution rate of 12.65%.
This ETF is built on the back of the S&P 500 Index ($SPX), but it's not just a passive tracker. It holds the stocks in the benchmark index, and then in addition to selling call options on the index, its managers buy put options on the same index. This creates a 'collar' effect, aiming to retain more of the upside potential of its holdings if the market breaks out to the upside.
SPYI manages $3.9 billion in assets. The fund's expense ratio is 0.68%, which is in line with its active approach and complex strategy. SPYI is down 2.4% in the year to date and 1.9% over the past 52 weeks.
The ProShares S&P 500 High Income ETF (ISPY) brings a new twist to the high-yield ETF space. Tracking the S&P 500 Daily Covered Call Index, ISPY is the first ETF to implement a daily covered call overlay on the S&P 500. This means that rather than the typical monthly or weekly cadence, ISPY writes fresh out-of-the-money call options every single trading day, using swap agreements to access the full S&P 500 portfolio and maximize option premium capture.
This high-frequency approach is designed to exploit the rapid time decay of daily options, allowing the fund to reset its strike price each day and adjust to changing market conditions. The result is a steady stream of elevated income, with the added benefit of some downside protection if markets turn choppy. However, this daily reset also means that returns are more closely tethered to short-term market swings, and the fund may lag in strong, sustained bull runs since upside is capped.
Its 12-month distribution rate is 12.82%, and like QYLD and SPYI, it pays out distributions monthly.
ISPY's assets under management stand at $740.3 million, and the fund charges an expense ratio of 0.55%, which is competitive for an actively managed, options-driven ETF. ISPY is down 7.9% in the year to date and 6.3% over the past 52 weeks.
High-yield covered call ETFs like QYLD, SPYI, and ISPY offer a compelling way to boost monthly income, though they do sacrifice some growth potential for those generous payouts.
Considering the current volatile investing environment, it's reasonable to expect these ETFs to stay relevant for income seekers in 2025.
On the date of publication, Ebube Jones did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com
Effettua l'accesso per consultare il tuo portafoglio
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Forbes
18 minutes ago
- Forbes
Game-Changing Wind Turbines Harvest Underused Resource Close To The Ground
Winds of Change: Kevin Wolf, CEO and co-founder of Wind Harvest Jimmy Dean, the country musician, actor and entrepreneur, famously said: 'I can't change the direction of the wind, but I can adjust my sails to always reach my destination.' A new wind turbine from a California startup, Wind Harvest, takes Dean's maxim to heart and applies it to wind power generation. It goes after untapped, abundant wind. Wind Harvest is bringing to market a possibly revolutionary but well-tested vertical axis wind turbine (VAWT) that operates on ungathered wind resources near the ground, thriving in turbulence and shifting wind directions. The founders and investors – many of them recruited through a crowd-funding mechanism — believe that wind near the ground is a great underused resource that can go a long way to helping utilities in the United States and around the world with rising electricity demand. The Wind Harvest turbines neither seek to replace nor compete with the horizontal axis wind turbines (HAWT), which are the dominant propeller-type turbines seen everywhere. These operate at heights from 200 feet to 500 feet above ground. Instead, these vertical turbines are at the most 90 feet above the ground and, ideally, can operate beneath large turbines, complementing the tall, horizontal turbines and potentially doubling the output from a wind farm. The wind disturbance from conventional tall, horizontal turbines is additional wind fuel for vertical turbines sited below. Studies and modeling from Caltech and other universities predict that the vortices of wind shed by the verticals will draw faster-moving wind from higher altitude into the rotors of the horizontals. For optimum performance, their machines should be located in pairs just about 3 feet apart and that causes the airflow between the two turbines to accelerate, enhancing electricity production. Kevin Wolf, CEO and co-founder of Wind Harvest, told me that they used code from the Department of Energy's Sandia National Laboratory to engineer and evaluate their designs. They believe they have eliminated known weaknesses in vertical turbines and have a durable and easy-to-make design, which they call Wind Harvester 4.0. This confidence is reflected in the first commercial installation of the Wind Harvest turbines on St. Croix, one of the U.S. Virgin Islands in the Caribbean. Some 20 turbines are being proposed for construction on a peninsula made from dredge spoils. This 1-megawatt project would produce 3000 megawatt hours of power annually. All the off-take from this pilot project will go to a local oil refinery for its operations, replacing propane generators. Wolf said the Wind Harvester will be modified to withstand Category 5 hurricanes; can be built entirely in the United States of steel and aluminum; and are engineered to last 70-75 years with some refurbishing along the way. Future turbines will avoid dependence on rare earths by using ferrite magnets in the generators. Recently, there have been various breakthroughs in small wind turbines designed for urban use. But Wind Harvest is squarely aimed at the utility market, at scale. The company has been working solidly to complete the commercialization process and spread VAWTs around the world. 'You don't have to install them on wind farms, but their highest use should be doubling or more the power yield from those farms with a great wind resource under their tall turbines,' Wolf said. Horizontal wind turbines, so named because the drive shaft is aligned horizontally to the ground, compared to vertical turbines where the drive shaft and generator are vertically aligned and much closer to the ground, facilitating installation, maintenance and access. Wolf believes his engineering team has eliminated the normal concerns associated with VAWTs, like resonance and the problem of the forces of 15 million revolutions per year on the blade-arm connections. The company has been granted two hinge patents and three others. Four more are pending. Wind turbines have a long history. The famous eggbeater-shaped VAWT was patented by a French engineer, Georges Jean Marie Darrieus, in 1926, but had significant limitations on efficiency and cost-effectiveness. It has always been more of a dream machine than an operational one. Wind turbines became serious as a concept in the United States as a result of the energy crisis that broke in the fall of 1973. At that time, Sandia began studying windmills and leaned toward vertical designs. But when the National Renewable Energy Laboratory assumed responsibility for renewables, turbine design and engineering moved there; horizontal was the design of choice at the lab. In pursuing the horizontal turbine, DOE fit in with a world trend that made offshore wind generation possible but not a technology that could utilize the turbulent wind near the ground. Now, Wind Harvest believes, the time has come to take advantage of that untouched resource. Wolf said this can be done without committing to new wind farms. These additions, he said, would have a long-projected life and some other advantages: Birds and bats seem to be more adept at avoiding the three-dimensional, vertical turbines closer to the surface. Agricultural uses can continue between rows of closely spaced VAWTs that can align fields, he added. Some vertical turbines will use simple, highly durable lattice towers, especially in hurricane-prone areas. But Wolf believes the future will be in wooden, monopole towers and to reduce the amount of embodied carbon in their projects. One way or another, the battle for more electricity to accommodate rising demand is joined close to the ground.
Yahoo
22 minutes ago
- Yahoo
Stocks tumble, dollar up as Middle East war lights safe-haven trade
By Kevin Buckland, Johann M Cherian and Amanda Cooper TOKYO/LONDON (Reuters) -Global stocks fell and the dollar rose on Thursday, reflecting investors' preference for perceived safe havens as concerns mounted over possible U.S. involvement in the Israel-Iran air war, which has ignited a rally in the oil price this week. On the geopolitical front, President Donald Trump kept the world guessing about whether the United States would join Israel's bombardment of Iranian nuclear sites, telling reporters outside the White House on Thursday: "I may do it. I may not do it." A flurry of central bank decisions in Europe highlighted how Trump's erratic approach to trade and tariffs has complicated the job of central bankers in setting monetary policy. In Europe, the STOXX 600 fell 0.6%, set for a third day of declines, having dropped nearly 2.5% on the week, which would mark its biggest week-on-week decline since the tariff-induced turmoil of April. U.S. S&P 500 futures fell almost 1%, although most U.S. markets - including Wall Street and the Treasury market - will be closed on Thursday for a public holiday. "Market participants remain edgy and uncertain," said Kyle Rodda, senior financial markets analyst at Speculation was rife "that the U.S. will intervene, something that would mark a material escalation and could invite direct retaliation against the U.S. by Iran", he added. "Such a scenario would raise the risk of a greater regional conflict, with implications for global energy supply and probably economic growth." Much of the recent nervousness in markets has been centred around crude supply shocks from the Middle East, which has driven the price of crude oil up by 11% in a week. Brent crude shot up 2% to $78 a barrel on Thursday, close to its highest since January. Gold traded around at $3,365 an ounce, slightly lower on the day. The dollar itself rose broadly, leaving the euro down 0.2% at $1.1462 and the Australian and New Zealand dollars - both risk-linked currencies - fell around 1%. CENTRAL BANK POLICY The Federal Reserve left interest rates unchanged on Wednesday, much to Trump's displeasure, and policymakers retained projections for two quarter-point rate cuts this year. Fed Chair Jerome Powell struck a cautious note about further easing ahead, saying that he expects "meaningful" inflation ahead as a result of Trump's aggressive trade tariffs. Strategists at MUFG said the Fed "is underestimating the weakness in the economy that was present before the tariff shock, specifically, almost ignoring the cracks that have been visible in the labor market for years." On Thursday, the Bank of England left UK rates unchanged, as expected, and policymakers said trade policy uncertainty would continue to hurt the economy, triggering a drop in the pound. The Norges Bank surprised markets on Thursday with a quarter-point cut that weighed on the crown currency, while the Swiss National Bank cut interest rates to zero, as expected, but the fact it did not go below zero gave the franc a lift, leaving the dollar down 0.1% at 0.8184 francs. In commodity markets, the price of platinum hit its highest in almost 11 years, near $1,300 an ounce, driven partly by what analysts said was consumers seeking a cheaper alternative to gold. (Additional reporting by Kevin Buckland in Tokyo and Johann M Cherian in Bengaluru, Editing by Shri Navaratnam, Bernadette Baum and Ed Osmond)
Yahoo
27 minutes ago
- Yahoo
Morning Bid: Markets breathe easier as Trump hedges on Iran
A look at the day ahead in European and global markets from Stella Qiu So, President Donald Trump said we may need to wait two more weeks until he decides whether to launch a U.S. attack on Iran. In the meantime, markets are mostly breathing a sigh of relief but remain cautious over conflict in the Middle East. Brent crude oil prices fell 2.5% on Friday, erasing some of their recent gains but still on track for a 3.7% weekly rise, up for a third straight week. Falling oil prices appear to have given European stocks a reason to cheer, with EUROSTOXX 50 futures rising 0.7% and FTSE futures up 0.3%. Nasdaq futures and S&P 500 futures were both 0.2% lower. Some analysts have pointed to Trump's two-week deadlines for other key decisions, including in letters to U.S. trade partners on tariff negotiations, and the hope is that Tehran in the interim will be pressured to come to the negotiating table. Stocks were mixed in Asia on Friday, with Japan and Australia falling while China was higher. South Korea's share benchmark outperformed with a jump of 1.1%, topping the 3,000 level for the first time since early 2022, after newly elected President Lee Jae Myung announced a stimulus spending plan. The U.S. dollar was also on the back foot, although it is set for a weekly gain of 0.5% on safe-haven flows spurred by the Middle East conflict. Still, one week of gains would not reverse the recent declining trend and many analysts expect the dollar's losses have further to run. China kept its benchmark lending rates unchanged on Friday as widely expected while data from Japan showed core inflation at a two-year high, keeping pressure on the Bank of Japan to hike rates again. Investors, however, doubt that such a move would come before December. Overnight, a number of central banks in Europe sent out dovish signals, including Norway's central bank which delivered its first rate cut since 2020. The Swiss National Bank cut rates to zero and did not rule out going negative, while the Bank of England held policy steady but saw a need for further easing. Key developments that could influence markets on Friday: -- Germany PPI data for May -- UK retail sales data for May -- ECB releases its economic bulletin (By Stella Qiu; Editing by Edmund Klamann) Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
