[High-Yield ETFs] Five U.S. stock high-dividend ETFs for you to choose from

Since the beginning of this year, as the rate-hike cycle has drawn to a close, market expectations for a decline in U.S. interest rates have grown increasingly strong. Consequently, the U.S. market has recently witnessed a surge in high-dividend stocks, with more and more investors turning to such securities to hedge against the risk of falling equity prices.

Although various sectors in the market include high-dividend companies that are eager to reward shareholders, for investors who are not adept at stock selection, there is a more stable and secure approach to equity investing: high-dividend stocks.ETFHigh-dividend ETFs—also known as dividend‑focused ETFs or Dividend ETFs—select their constituent stocks and determine the weighting of each holding primarily based on companies' cash dividend payout histories. Particularly in today's environment of dual political and economic uncertainty, where stock market trends are hard to predict, investing in high‑dividend ETFs can deliver regular, tangible returns. Moreover, the diverse equity portfolios tracked by different products help diversify risk, making these ETFs an ideal choice for conservative investors seeking stability.

How to Choose a High-Dividend ETF

In general, to select the ETF that best suits your needs from among many options, you can start by evaluating three key factors: the underlying index, performance, and the ETF's structure.

1. Index: Understand Which Assets You're Buying

High-dividend ETFs typically track specific dividend indices, such as the Hang Seng High Dividend Yield Index or the S&P High Dividend Aristocrats Index. These indices generally comprise stocks of companies that demonstrate stable dividend payouts and relatively high yields, though their exact constituent holdings can vary. As prudent investors, we should develop a solid understanding of an ETF's portfolio and the rationale behind its stock selections to avoid the situation where a single poor-performing holding tarnishes the entire investment.

2. Performance of Returns: Understanding How Yield and Dividend Payout Ratio Work

Investors typically purchase high-dividend ETFs because they expect stable, relatively high dividend yields. Therefore, when selecting a product, it's important to compare the current yield and dividend yield of different high-dividend ETFs, while also considering the trend in dividend growth, to choose funds with strong dividend‑paying capacity and the potential for sustained increases.

3. ETF Mechanism: Reducing the Scope of "Agents' Price Spread Profits"

A range of equity‑based ETF products offered by institutions are available for direct purchase, and they inevitably charge management fees as compensation. As investors, we should compare the fee structures of different products, since ETF management fees and operating costs directly impact net returns; lower expense ratios help boost investors' net yields. Additionally, for the specific category of high‑dividend ETFs, investors should pay attention to their dividend‑distribution frequency: if an ETF allows dividend reinvestment, more frequent payouts can accelerate the compounding effect on holdings. However, if investors do not require immediate cash flow, fewer but larger distributions—provided the total payout remains the same—may be more advantageous, as they can reduce transaction and tax expenses.

Recommended High-Dividend ETFs (U.S. Stocks)

Below, we will recommend several high-dividend ETFs available in the U.S. stock market, allowing you to choose based on your investment preferences:

JEPI

$JPMorgan Equity Premium Income ETF(JEPI.US)$It is a ... made ofJPMorgan's Covered Call ETF, it tracks companies in the S&P 500 and, by selling the premium from long call options, provides investors with additional income, aiming to deliver distributable income and equity market exposure on a monthly basis with lower volatility. According to data provided by JPMorgan, this ETF has three major advantages:

1. Offers an attractive 12-month rolling dividend yield of 8.50% and a 30-day total return of 7.04%;

2. The yield ranks in the top third among products of the same category.

3. Compared with its peers, the pricing is more competitive, with an expense ratio of just 0.35%.

Currently, Hong Kong investors are subject to a 30% dividend tax when purchasing this ETF, whereas individual investors in mainland China pay a 10% dividend tax, typically withheld directly from the distribution. The following four ETFs also follow the same tax treatment.

RYLD

$Global X Russell 2000 Covered Call ETF(RYLD.US)$This ETF tracks the Russell 2000 Index, which measures the performance of the 2,000 smallest companies listed on the U.S. market and is widely regarded as a benchmark for the small-cap segment. By selling 50% of the portfolio's call options, the fund enables investors to capture half of the index's upside potential. As of now, the ETF has approximately $1.4 billion in assets under management, with an expense ratio of 0.35%, a dividend yield of 12.56%, and an average annual Fund NAV growth rate of 12.74%.

KBWD

$Invesco KBW High Dividend Yield Financial ETF(KBWD.US)$，This ETFFounded in December 2010, it tracks the KBW Nasdaq Financial Dividend Yield Index and primarily invests in U.S. real estate investment trusts and the financial sector, holding a relatively small number of stocks—only 41. Its major holdings include Dynex Capital, Ellington Financial Inc., and Western Union, among others.

1. This ETF boasts a high dividend yield, exceeding 10%.

2. As of now, the ETF has total assets under management of approximately $359 million, a management fee of 0.35%, a dividend yield of about 12.3%, and a 30-day SEC yield of 11.9%, with monthly distributions.

QYLD

$Global X Nasdaq 100 Covered Call ETF(QYLD.US)$This ETF primarily invests in U.S. growth stocks in sectors such as AI and semiconductors, with tech giants like NVIDIA, Microsoft, Apple, and others among its constituents. It generates additional income through a covered call strategy: it buys shares of the Nasdaq 100 index and sells corresponding long calls on the same index to collect option premiums, while also distributing dividends to shareholders. This approach tends to deliver higher returns during periods of market volatility.

As of now,This ETFWith total assets of approximately USD 8.1 billion, the fund charges a management fee of 0.61%, pays a dividend yield of 11.70%, and delivers a 12-month dividend‑yielded return of 12.32%, with monthly distributions.

IDV

If, aside from the U.S., you're also bullish on other overseas markets, you can choose…$iShares International Select Dividend ETF(IDV.US)$This ETF focuses on high-dividend investing. It targets large markets outside the United States, with a strong presence in countries such as the United Kingdom, Australia, South Korea, Japan, and Spain. For example, it holds shares in London-based mining giant Rio Tinto (RIO) and Japanese shipping giant Nippon Yusen (NPNYY), both of which offer dividend yields of around 7%.

As of now, the ETF has assets under management of approximately $4.1 billion, with an expense ratio of 0.51%, a dividend yield of 6.79%, and a five-year total return—including dividends—of 10.75%, paying quarterly distributions.

It is worth noting that the tax treatment of ETFs also depends on the assets they hold. Since U.S. Treasury bonds are exempt from state and local taxes, ETFs that invest in U.S. Treasuries—such as TLT—also enjoy tax-free dividend distributions at the state and local levels.

Since dividend distributions are key to this type of ETF, investors should first familiarize themselves with the withholding tax and tax refund rules when purchasing on the platform. For details, please refer to Futu's previous articles:ETF Tax Rebate Guide: Understanding Your Investment Returns

Summary

With the dual objectives of generating stable income and capturing potential capital appreciation, U.S. high-dividend ETFs offer investors an ideal tool for effectively diversifying risk and earning passive income, making them a suitable choice for those seeking returns while willing to accept a moderate trade-off in upside potential.

How do you trade U.S. equity high-yield ETFs?

Before investing in Japanese ETFs, you must first open a securities account—just as you need to open a bank account before depositing money.