3 High-Yield Dividend ETF to Buy to Generate Passive Income

2025-02-05 08:30:00 ET

Money market yields have been falling over the past few months, but that doesn't mean you have to settle for less. Income-generating stocks march to a different beat. Payouts keep widening, sometimes even faster than a stock's upticks.

If you're looking for cash distributions and diversification, you may want to consider income-generating exchange-traded funds (ETFs) to round out your portfolio. Some of the attractive ETFs that can deliver passive income with the potential for some capital appreciation include iShares Core High Dividend ETF (NYSEMKT: HDV) , Global X US Preferred ETF (NYSEMKT: PFFD) , and Cambria Foreign Shareholder Yield (NYSEMKT: FYLD) .

If you're looking for a steady cadence of passive income, iShares Core High Dividend ETF checks off a lot of the right boxes. It currently yields 3.7%, three times the rate of the S&P 500 (SNPINDEX: ^GSPC) . It has a long history of strong performance, rising 14% last year, with an annual total return average of nearly 10% since its inception in the springtime of 2011. It's a popular choice, with nearly $11 billion in total assets. It's also an index fund, packing a low expense ratio of 0.08%.

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