ETF, or Exchange-Traded Fund, is a type of investment fund that is traded on stock exchanges, like individual stocks. An ETF holds a portfolio of assets, such as stocks, bonds, or commodities, and is designed to track the performance of a particular market index, sector, or theme.
A dividend ETF is a type of ETF that invests primarily in dividend-paying stocks, with the goal of providing income through regular dividend payments to investors. These ETFs can provide exposure to a diverse portfolio of dividend-paying stocks, which can help to mitigate the risk associated with investing in individual stocks. Additionally, dividend ETFs may offer a more convenient and cost-effective way to invest in dividend-paying stocks, as they eliminate the need to research and select individual stocks.
It is difficult to make specific predictions about the performance of dividend ETFs in 2023, as many factors can impact the stock market and the financial performance of individual companies. However, dividend ETFs can provide a source of stability and income in a volatile market, as they may be less susceptible to sharp declines in value compared to non-dividend paying stocks. Additionally, dividend ETFs can provide diversification, as they hold a portfolio of stocks, rather than just a single stock, reducing the risk of losses due to the underperformance of a single company.
Here we’ll provide you 3 high dividend ETFs with over 10% yield for you to consider for 2023.
1. JPMorgan Equity Premium Income ETF (JEPI)
JPMorgan Equity Premium Income ETF (JEPI) is an exchange-traded fund (ETF) managed by JPMorgan Asset Management. JEPI is designed to provide investors with a source of income and capital appreciation through investments in high-quality, dividend-paying equities.
The fund’s investment strategy focuses on generating a higher level of income than what is typically generated from traditional equity investments, while also providing exposure to high-quality equities that have the potential for long-term growth. To achieve this, JEPI invests in a diversified portfolio of dividend-paying stocks that have a strong track record of paying and growing their dividends, as well as a history of financial stability and solid business fundamentals.
JEPI’s portfolio is comprised of high-quality, dividend-paying equities from a variety of sectors, including consumer staples, healthcare, and utilities. The fund uses a multi-factor investment process to select stocks for the portfolio, considering factors such as dividend yield, dividend growth, financial stability, and valuations.
JEPI’s focus on high-quality, dividend-paying equities, and its diversified portfolio, can provide investors with a source of stability and income in a volatile market. Additionally, JEPI’s focus on generating income through dividends can provide a more consistent return compared to non-dividend paying stocks, which rely solely on capital appreciation for returns.
It is important to note that while JEPI can be a good addition to a diversified investment portfolio, it is not without risk. The performance of JEPI is closely tied to the performance of the underlying stocks, and the amount and frequency of dividend payments can vary. Additionally, the fund’s performance is also affected by market conditions, interest rate fluctuations, and other macroeconomic factors. It is important to thoroughly research and consider all relevant factors, including the ETF’s holdings, fees, and expenses, before investing in JEPI.
Fund Overview
| Category | Covered Call |
| Fund Family | JPMorgan |
| Net Assets | 17.4B |
| YTD Daily Total Return | 1.71% |
| Yield | 11.68% |
| Legal Type | Exchange Traded Fund |
| Annual Report Expense Ratio | 0.35% |
| Inception Date | 05/20/2020 |
2. Global X NASDAQ 100 Covered Call ETF (QYLD)
Global X NASDAQ 100 Covered Call ETF (QYLD) is an exchange-traded fund (ETF) managed by Global X Funds. The ETF is designed to provide investors with exposure to the NASDAQ 100 Index, a basket of the largest and most influential technology and non-technology companies listed on the NASDAQ stock exchange, while also generating income through a covered call option strategy.
A covered call option strategy involves selling call options, which are financial contracts that give the buyer the right, but not the obligation, to purchase an underlying asset at a specific price and date. By selling call options, the ETF can generate additional income on its holdings, which can help to offset the impact of declining stock prices and provide a more consistent return.
QYLD invests in a diverse portfolio of stocks that make up the NASDAQ 100 Index, including technology giants such as Apple, Amazon, and Facebook, as well as non-technology companies such as Comcast and Cisco Systems. The ETF uses a covered call option strategy to generate additional income, which is reflected in its higher yield compared to other ETFs that track the NASDAQ 100 Index.
The ETF’s focus on generating income through a covered call option strategy can provide a source of stability and income in a volatile market, as the income generated from the option premiums can help to offset the impact of declining stock prices. Additionally, QYLD’s exposure to the NASDAQ 100 Index can provide investors with exposure to some of the largest and most influential technology and non-technology companies in the world.
It is important to note that while QYLD can be a good addition to a diversified investment portfolio, it is not without risk. The performance of QYLD is closely tied to the performance of the underlying stocks, and the income generated from the covered call option strategy can vary. Additionally, the ETF’s performance is also affected by market conditions, interest rate fluctuations, and other macroeconomic factors. It is important to thoroughly research and consider all relevant factors, including the ETF’s holdings, fees, and expenses, before investing in QYLD.
Fund Overview
| Category | Covered Call |
| Fund Family | Global X Funds |
| Net Assets | 6.39B |
| YTD Daily Total Return | 7.10% |
| Yield | 13.74% |
| Legal Type | Exchange Traded Fund |
| Annual Report Expense Ratio | 0.60% |
| Inception Date | 12/11/2013 |
3. Global X Russell 2000 Covered Call ETF (RYLD)
Global X Russell 2000 Covered Call ETF (RYLD) is an exchange-traded fund (ETF) managed by Global X Funds. The ETF provides exposure to the Russell 2000 Index, which is a basket of small-cap companies in the United States, while also generating income through a covered call option strategy. The ETF invests in a diverse portfolio of small-cap companies and uses a covered call option strategy to generate additional income, which is reflected in its higher yield compared to other ETFs that track the Russell 2000 Index. The ETF’s focus on generating income through a covered call option strategy can provide a source of stability and income in a volatile market, but it is not without risk, and it is important to thoroughly research and consider all relevant factors before investing.
Fund Overview
| Category | Covered Call |
| Fund Family | Global X Funds |
| Net Assets | 1.36B |
| YTD Daily Total Return | 3.87% |
| Yield | 13.50% |
| Legal Type | Exchange Traded Fund |
| Annual Report Expense Ratio | 0.60% |
| Inception Date | 04/17/2019 |
In conclusion, high dividend ETFs can be a great option for investors looking for income in 2023. The JPMorgan Equity Premium Income ETF (JEPI), Global X NASDAQ 100 Covered Call ETF (QYLD), and Global X Russell 2000 Covered Call ETF (RYLD) are just three of the many high dividend ETFs available to investors.Others, such as JPMorgan Nasdaq Equity Premium Income ETF (JEPQ) pay a 15.89% yield, Global X S&P 500 Covered Call ETF (XYLD) also pay a 13.42% yield.
When choosing a high dividend ETF, it is important to carefully consider the ETF’s holdings, fees, and expenses, as well as market conditions and other macroeconomic factors. It is also important to remember that high dividend ETFs are not without risk, and investing in a diversified portfolio is the best way to mitigate that risk. With that in mind, high dividend ETFs can be a valuable addition to a well-diversified investment portfolio, offering a stable source of income in a volatile market.
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