Exchange-traded funds, commonly known as ETFs, have become one of the world’s most popular investment vehicles. ETFs are easy to understand, easy to trade and have a reasonable cost structure. ETFs cover a large variety of asset classes and just about any investment strategy an investor can think of.
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There are equity ETFs that invest in stocks of all sectors and all market caps, and there are fixed-income ETFs that invest in all kinds of bonds, from U.S. Treasurys to junk bonds. Stocks and bonds, however, are only the beginning. Just about any asset class and any investment theme you can think of has one or several ETFs that focus on it. They include real estate investment trusts, or REITs, master limited partnerships, or MLPs, business development companies, or BDCs, options and futures contracts, and even cryptocurrencies.
When it comes to ETF investing, people with high current income as their primary investment objective have plenty of options to choose from. Most top asset managers offer several high-dividend ETFs that focus on providing a superior dividend yield to shareholders. Some income investors, such as retired people, use dividends to supplement their income and defray monthly expenses. Others reinvest their dividends back into the market to grow their capital and increase their income for the future.
If collecting a high dividend income is part of your investment strategy, and you appreciate the simplicity and convenience of ETFs, the following list is for you. It highlights seven of the best high-dividend ETFs you can own, and each one takes a unique approach to generating consistent dividends.
| ETF | Expense Ratio | Forward Dividend Yield* |
| FT Cboe Vest S&P 500 Dividend Aristocrats Target Income ETF (ticker: KNG) | 0.75% | 8.6% |
| SPDR Blackstone Senior Loan ETF (SRLN) | 0.70% | 8.5% |
| Virtus Private Credit ETF (VPC) | 9.7% | 11.3% |
| Franklin Income Focus ETF (INCM) | 0.38% | 5.3% |
| VanEck Preferred Securities ex Financials ETF (PFXF) | 0.40% | 7.9% |
| ProShares Nasdaq-100 High Income ETF (IQQQ) | 0.55% | 9.9% |
| VanEck BDC Income ETF (BIZD) | 13.3% | 10.8% |
*As of April 25 close.
FT Cboe Vest S&P 500 Dividend Aristocrats Target Income ETF (KNG)
KNG is a $3.7 billion First Trust Advisors ETF that combines two popular income generation strategies in a single fund. First, it mirrors the S&P 500 Dividend Aristocrats Index. Next it writes short-duration covered calls against the component stocks.
King is an index fund that tracks the Cboe S&P 500 Dividend Aristocrats Target Income Index. The fund earns significant dividend income by holding all of the the Dividend Aristocrats — S&P 500 companies that have raised their annual dividend for at least 25 consecutive years — and then earns premium income by selling covered calls against those stocks.
One of the objectives of KNG is to provide shareholders with a yield that’s about 8% higher than the yield of the S&P 500. The fund has an expense ratio of 0.75%.
Dividend yield: 8.6%
SPDR Blackstone Senior Loan ETF (SRLN)
SRLN is a unique type of ETF known on Wall Street as a bank loan fund.
Bank loans are not well known to retail investors but are very popular with institutional investors like insurance companies, pension funds and asset managers such as Blackstone Inc. (BX). Bank loans are pools of business loans that were underwritten by regional banks and subsequently collateralized and turned into bonds by Wall Street investment bankers.
SRLN is a $7.8 billion bank loan ETF that uses the Markit iBoxx USD Liquid Leverage Loan Index and the Morningstar LSTA U.S. Leverage Loan 100 Index as its primary benchmarks. The fund’s objective is to outperform — not merely match — both of its benchmarks.
SRLN’s portfolio managers analyze all of the bonds that make up its benchmarks. They check credit quality, yield, duration and other factors. From among that universe of securities, they select only the best.
SRLN has an expense ratio of 0.7%.
Dividend yield: 8.5%
Virtus Private Credit ETF (VPC)
VPC is a relatively small fund, but it merits a place on this list due to its exceptional yield and its unique asset class, which can enhance the diversification profile of almost any portfolio.
VPC is an index fund that tracks the Indxx Private Credit Index. That innovative index was designed to reflect the performance of the publicly traded U.S. BDC and private credit closed-end fund market.
There are only about 60 holdings in the VPC portfolio, but they offer good diversification considering the small universe of securities it invests in. VPC is a dividend-weighted fund, which means that higher-yielding BDCs will have a greater impact on the income and appreciation performance of the fund. The end result of the dividend weighting methodology is a higher yield for shareholders.
Investors may notice this fund’s exceptionally high expense ratio of 9.7%, but there is no cause for alarm. The stated expense ratio is mostly acquired fund fees that the ETF must include in its fee table but that are not paid directly from the net assets of the fund.
Dividend yield: 11.3%
Franklin Income Focus ETF (INCM)
INCM is a $558 million fund with an innovative dividend-generating strategy. The fund invests in a precise mix of stocks and bonds of publicly traded U.S. companies. On top of the traditional securities it owns, it also buys equity-linked notes and equity index-linked notes to further enhance income.
Equity-linked notes don’t pay regular income. Instead, they collect profits when they mature if the target index has positive performance. Equity index-linked notes work similarly, but they pay income based on the volatility of the target index.
More conservative investors shouldn’t necessarily be afraid of the derivatives in this fund. The equity-linked notes and equity index-linked notes are carefully selected, and most of the portfolio consists of regular stocks and bonds of well-known companies such as Chevron Corp. (CVX), JPMorgan Chase & Co. (JPM) and Exxon Mobil Corp. (XOM).
The expense ratio of the fund is 0.38%.
Dividend yield: 5.3%
[READ: 7 Best Thematic ETFs to Buy in 2025]
VanEck Preferred Securities ex Financials ETF (PFXF)
The first thing to know about preferred stocks is that they are primarily income vehicles. They are bought and sold like common stock, but they provide no equity and confer no voting rights to shareholders. Generally, they should be looked at as fixed-income securities.
PFXF owns preferred stocks from all GICS sectors except for financials. The ETF buys fixed-rate and adjustable-rate securities, as well as convertible preferred stocks, which are preferred shares that can be exchanged for common stock at a fixed exchange rate.
This $1.8 billion fund tracks the ICE Exchange-Listed Fixed & Adjustable Rate Non-Financial Preferred Securities Index. The index is cap-weighted. Investors can expect larger companies to have an outsized influence on the fund’s performance. PFXF carries an expense ratio of 0.4%.
Dividend yield: 7.9%
ProShares Nasdaq-100 High Income ETF (IQQQ)
IQQQ follows an options buy/write strategy similar to KNG, the first ETF highlighted on this list. The main difference is in the target indexes the funds use. KNG uses the S&P 500 Dividend Aristocrats Index, while IQQQ uses the Nasdaq-100 index.
IQQQ is a relatively small index fund with $101 million in net assets on the books. The fund mirrors the Nasdaq-100 Daily Covered Call Index.
IQQQ owns the component stocks of the Nasdaq-100. It collects the quarterly dividends those stocks produce and also generates significant premium income by writing short-term covered calls against them.
This fund has an expense ratio of 0.55%
Dividend yield: 9.9%
VanEck BDC Income ETF (BIZD)
BIZD is a $1.5 billion BDC index ETF that mirrors the performance of the MVIS Business Development Company Index. The fund can be used as a reliable proxy for the entire domestic business development company (BDC) universe.
A BDC is a unique kind of closed-end investment company that earns its money by making loans and equity investments to small and midsize private and thinly traded public companies.
This fund is cap-weighted. This is in contrast to VPC, the other BDC fund on this list, which is dividend-weighted. In other words, larger BDCs will have a bigger impact on BIZD’s performance.
Both BIZD and VPC offer investors exposure to high-yielding BDCs, but they take different approaches to that interesting and potentially profitable asset class.
The fund’s expense ratio is reported as 13.3%, but the large majority of those costs are acquired fund fees that are required to be listed as expenses but are not paid from the fund’s net assets.
Dividend yield: 10.8%
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The 7 Best High-Dividend ETFs to Buy Today originally appeared on usnews.com
Update 04/28/25: This story was published at an earlier date and has been updated with new information.
