Best High-Yield ETFs To Buy Now

The best high-yield ETFs show that there's no shortage of ways to balance risk and reward in the quest for better-than-average income.

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When it comes to high-yield ETFs, it pays to think beyond the usual dividend stock funds. After all, the average yield across the S&P 500 index of large-cap stocks is a mere 1.4% at present. 

Furthermore, the largest dividend ETF by assets – the Vanguard Dividend Appreciation ETF (VIG), which carries nearly $78 billion of client money – offers a mere 1.8% yield. Put another way, even if you had a $1 million investment, you'd generate $18,000 in income annually via this fund. That's nowhere near what most folks need to live a comfortable retirement

How we chose the best high-yield ETFs to buy

The following six high-yield ETFs all take income much more seriously. Specifically, our methodology for finding the best ETFs to buy includes looking for funds that offer yields of at least 6%, quadrupling the yield of the S&P 500. Furthermore, we looked for exchange-traded funds that have at least $250 million in assets under management and are well-established.

Keep in mind that the dividend yields on equity ETFs represent the trailing 12-month yield, which is a standard measure for stock funds. There is no guarantee that future distributions will keep up or that any potential share price declines offset any of the income you receive.

That said, if you're not opposed to such risk, then these high-yield ETFs are worth considering because of their much more generous approach to income than the typical large-cap stock fund.

Jeff Reeves
Contributing Writer,

Jeff Reeves writes about equity markets and exchange-traded funds for Kiplinger. A veteran journalist with extensive capital markets experience, Jeff has written about Wall Street and investing since 2008. His work has appeared in numerous respected finance outlets, including CNBC, the Fox Business Network, the Wall Street Journal digital network, USA Today and CNN Money.