Guide to High Dividend-Paying ETFs

Unsteady Global Markets

While some recent Big Tech earnings offered fresh cues to Wall Street for a further rally, the undercurrent of the global markets looks anything but steady. Meanwhile, the Middle East tensions persist.

Traders await further signs of whether the United States and Iran can reach a foolproof peace deal that would reopen the Strait of Hormuz. Trump said that a Strait of Hormuz deal could happen soon as Iran-Oman talks progress, as quoted on CBS News.

Meanwhile, sticky inflation and rising rate fears are putting pressure on markets. Treasury yields climbed sharply following the Federal Reserve's decision to keep interest rates unchanged at the July-end meeting without offering clear forward guidance.

The benchmark 10-year Treasury yield closed July at 4.75%, its highest level since January 2025 (per CNBC), while the 30-year Treasury yield climbed to 5.27%, the highest since 2007. There is a 54.7% chance of a 25-bp Fed rate hike in the September meeting (at the time of writing), per CMER FedWatch Tool. Investors grew increasingly concerned that elevated borrowing costs could pressure equity valuations (read: Fed Holds Rates Steady, May Hike Ahead: ETFs in Focus).

Time for Dividend Investing?

In such a volatile scenario, dividend exchange-traded funds (ETFs) normally come to the rescue. The hunt for dividends in the equity market is always on, irrespective of how it is behaving. After all, who doesn’t like a steady stream of current income along with capital gains? And if investors are mired in a web of equity market uncertainty, global growth worries and geopolitical crisis, the lure for dividend investing increases further.

Investors should note that not all dividend stocks serve the same purpose. While the high-yield ones are known for offering hefty current income, stocks with dividend growth point to quality investing — a prerequisite to making money in this volatile environment.

Against this backdrop, it makes sense to hold some higher-yielding, dividend-based ETFs. If the Fed hikes rates further, high current income could help investors weather the adverse impact to some extent.

ETFs in Focus  

Global X SuperDividend ETF SDIV

The underlying Solactive Global SuperDividend Index tracks the performance of 100 equally weighted companies that rank among the highest dividend-yielding equity securities in the world. SDIV has maintained monthly distributions for 10 straight years.

The 105-stock fund has an asset base of around 1.22 billion and has double-digit weight in the financials (31.1%), real estate (16.6%) and energy (16%) sectors. The fund has 34.3% weight in the United States, followed by 19.6% weight in Brazil. No stock makes up more than 1.73% of the fund. It charges 58 bps in fees and yields 9.05% annually.

Global X Alternative Income ETF ALTY

The underlying Indxx SuperDividend Alternatives Index tracks the performance of the highest dividend-yielding securities in each category of alternative investments, as defined by the Index Sponsor. ALTY has paid monthly distributions for 10 consecutive years.

The fund with 19 securities invests 64.84% of its assets in the energy sector and 35.16% in the utilities sector. It charges 50 bps in fees and yields 7.44% annually. 

Global X SuperDividend U.S. ETF DIV

The underlying INDXX SuperDividend U.S. Low Volatility Index tracks the performance of 50 equally weighted common stocks, MLPs & REITs that rank among the highest dividend-yielding equity securities in the United States. Energy, real estate and consumer staples are the top three sectors of the fund. No stock accounts for more than 3.03% of the fund. The fund has an asset base of $784 million and charges 45 bps in fees. DIV yields 6.44% annually.

Amplify CWP Enhanced Dividend Income ETF DIVO

DIVO is an ETF of high-quality, large-cap companies with a history of dividend and earnings growth, along with a tactical covered call strategy on individual stocks. Financials, IT, industrials and consumer discretionary have a double-digit weight in the fund. DIVO has an asset base of $7.6 billion. It charges 56 bps in fees and yields 6.25% annually.  

iShares International Select Dividend ETF IDV

The underlying Dow Jones EPAC Select Dividend Index measures the performance of a select group of equity securities issued by companies that have provided relatively high dividend yields on a consistent basis over time. IDV is heavy on the financials, energy and utilities sectors. The $8.45 billion fund charges 50 bps in fees and yields 5.12% annually. 

First Trust Dow Jones Global Select Dividend Index Fund FGD

The underlying Dow Jones Global Select Dividend Index is an indicated annual dividend yield-weighted index of 100 stocks selected from the developed-market portion of the Dow Jones World Index. FGD has double-digit weight in the financials, industrials and consumer discretionary sectors. It has an asset base of $1.57 billion and charges 55 bps in fees and yields 4.97% annually.

NEOS Nasdaq-100 Hedged Equity Income ETF QQQH

The NEOS Nasdaq-100 Hedged Equity Income ETF seeks high monthly income in a tax-efficient manner with a measure of downside protection. Due to the exposure to the Nasdaq-100, the fund is heavy on the tech sector. QQQH has company-specific concentration risks. It has an asset base of $378 million and charges 68 bps in fees. The fund yields 8.20% annually.

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