Investors continue to grapple with volatility amid geopolitical tensions in the Middle East and macroeconomic uncertainty. In this scenario, those seeking a steady stream of income can consider adding bond exchange-traded funds (ETFs) to their portfolios. Bond ETFs offer attractive yields and the benefit of diversification at a low cost.
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Here, we will look at three bond ETFs with very high dividend yields: SPDR Bloomberg High Yield Bond ETF (JNK), Xtrackers USD High Yield Corporate Bond ETF (HYLB), and iShares Aaa-A Rated Corporate Bond ETF (QLTA).
TipRanks’ ETF Comparison Tool gives a snapshot of these ETFs across key metrics.
SPDR Bloomberg High Yield Bond ETF (JNK)
The JNK ETF tracks the Bloomberg High Yield Very Liquid Index and offers exposure to U.S. dollar-denominated high-yield corporate bonds with above-average liquidity. High-yield bonds are generally rated below investment grade and are commonly referred to as “junk bonds.” However, these junk bonds are often preferred by investors for their potential to generate significant returns.
Interestingly, the JNK ETF has paid about $6.372 per share in dividends over the past year. It offers a dividend yield of about 6.59%.
Xtrackers USD High Yield Corporate Bond ETF (HYLB)
The HYLB tracks the Solactive USD High Yield Corporates Total Market Index and provides exposure to a wide array of issuers and sectors within the high-yield bond space. It includes a blend of short to long-term fixed-income instruments, with the aim of balancing risk and return.
The HYLB ETF has paid $2.361 per share in dividends over the past year. It offers a dividend yield of about 6.44%.
iShares Aaa-A Rated Corporate Bond ETF (QLTA)
The QLTA ETF tracks the Bloomberg U.S. Corporate Aaa – A Capped Index and is suitable for investors seeking exposure to the highly rated fixed-rate U.S. dollar-denominated bonds issued by U.S. and non-U.S. corporations. It comprises corporate bonds with credit ratings of Aaa to A, considered to be of the highest credit quality. QLTA is suitable for investors seeking a reliable income stream with a strong emphasis on creditworthiness.
With dividends of more than $2.101 per share paid over the past year, the QLTA ETF offers a dividend yield of 4.4%.
