Harry Domash's Winning Investing

My Favorite High Dividend ETFs

 With the market recently looking a little wobbly, this might be a good time to consider shifting some of your portfolio from growth to steady income.

With that in mind, here’s my new list of five favorite high-dividend ETFs, with yields ranging from 6.6% to 11.1%.

This time, four of the five are monthly payers. 

ProShares Global Listed Private Equity (PEX)

Private equity players invest in start-ups that haven’t yet gone public. ProShares holds 30 or so private equity players; about half in the U.S and the balance in Europe and England. The fund has returned (dividends plus share price appreciation) 30% year-to-date, 41% over the past 12-months and averaged 14% annually over the past three years. It pays quarterly dividends equating to a 9.3% yield.

Global X Russell 2000 Covered Call (RYLD):

Call options give the holder the right, but not the obligation, to purchase a stock at a predetermined price. This fund employs a covered call strategy that involves selling call options on stocks that it owns. Many dividend-focused funds employ similar  strategies to generate the cash needed to pay their dividends. An April 2019 IPO, the fund has returned 26% year-to-date and 31% over the past 12 months. It pays monthly dividends equating to an 11.1% yield.

Global X Alternative Income (ALTY)

Holds a variety of high dividend paying funds and individual stocks. The fund has returned 22% year-to-date, 27% over 12 months, and averaged 6% annually over three years. It is currently paying a monthly dividend equating to a 6.6% yield.

Amplify High Income (YYY)

Amplify focuses on closed-end funds, which are similar to ETFs except that instead of issuing and redeeming shares as needed, they issue a fixed number of shares at the IPO. After that, they trade on the open market just like stocks. However, unlike ETFs, closed-end funds often use borrowed funds to enhance returns. For instance, they might borrow at 1% to purchase bonds returning 3%. Consequently, closed-end funds often outperform ETFs focusing on the same market sector.

Amplify holds a diversified portfolio of closed-end funds. It has returned 16% year-to-date, 22% over the past 12-months, and averaged 10% annually over three years. Amplify is currently paying monthly dividends equating to an 8.9% dividend yield.

Virtus InfraCap U.S. Preferred Stock (PFFA)

Holds more than 150 preferred stocks issued by U.S.-based corporations. Virtus has returned 22% year-to-date, 28% over 12-months, and averaged 11% annually over three yeas. It’s currently paying a monthly dividend equating to a 7.2% yield.

Those are my favorites. But as always, do you own due-diligence. The more you know about your stocks and funds, the better your results.

published 11/22/21

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