Dividend ETFs remain popular among income-focused investors, but some stand out for their higher yields. According to TipRanks’ High Dividend Yield ETFs tool, three funds currently offer yields above 8%: iShares 20+ Year Treasury Bond BuyWrite Strategy ETF (TLTW), Westwood Salient Enhanced Midstream Income ETF (MDST), and Global X SuperDividend ETF (SDIV).
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For context, a dividend ETF (Exchange-Traded Fund) is a fund that holds a basket of dividend-paying stocks and trades on an exchange like a regular stock.
Let’s take a look at these ETFs in detail.
iShares 20+ Year Treasury Bond BuyWrite Strategy ETF (TLTW)
The iShares 20+ Year Treasury Bond BuyWrite Strategy ETF (TLTW) invests in long-term U.S. Treasury bonds and uses an options strategy to generate extra income. It aims to provide steady income while reducing some of the volatility from interest rate changes.
TLTW offers a 12.83% dividend yield, paying $0.121 per share monthly. The ETF has a 0.35% expense ratio and a beta of 0.04, indicating very low volatility compared to the broader market.
Westwood Salient Enhanced Midstream Income ETF (MDST)
The Westwood Salient Enhanced Midstream Income ETF (MDST) invests in midstream energy companies that transport and store oil and gas. It focuses on MLPs to provide steady income and potential growth through dividends and capital gains.
The fund has a beta of 0.34, but has a slightly higher expense ratio of 0.80%. MDST offers a 9.06% dividend yield, paying $0.225 per share monthly.
In terms of holdings, MDST holds 24 stocks with total assets worth $254.68 million. Its top 3 holdings are Energy Transfer (ET), Enbridge (ENB), and Williams Companies (WMB).
Global X SuperDividend ETF (SDIV)
Global X SuperDividend ETF focuses on high-yield dividend stocks from around the world, aiming to provide consistent monthly income. The ETF is known for its elevated yield, but it also carries higher risk, as many of its holdings are in slower-growth or more volatile sectors. The fund tracks the Solactive Global SuperDividend Index.
SDIV has a high yield of 9%, providing investors with strong passive income potential. It pays dividends per share of $0.18 monthly.
Meanwhile, the fund carries an expense ratio of 0.58%. The ETF holds 102 stocks with total assets of $1.27 billion.