ETFs
3 ETFs That Deliver Ultra-High Returns of Over 6%
Investors seeking income might appreciate these exchange-traded funds.
Exchange-traded funds (ETFs) can be great for any investing style. Looking for growth? No problem. Are you a value investor? There are plenty of ETFs you’ll probably like. Looking for income? There are plenty of ETFs to choose from, too.
Even if you want to earn exceptionally high returns from your investments, you won’t have a hard time finding attractive alternatives. Here are three ETFs that offer ultra-high yields of over 6%.
1. JPMorgan Equity Premium Income ETF
JPMorgan Equity Premium Income ETF from JPMorgan Chase (JEPI 0.71%) offers a juicy 30-day SEC yield of 6.88%. Income-seeking investors will particularly appreciate the fact that the fund pays its distributions monthly.
How is this JPMorgan ETF able to pay such a large distribution? Mainly by selling out of the money S&P 500 hint purchase options.
The ETF holds 132 stocks. Some pay dividends, but others don’t. And many of the ones that do offer dividend programs don’t have high yields. For example, the fund’s top five holdings are Amazon, Meta-platforms, Microsoft, Trane TechnologiesAnd ProgressiveAmazon does not pay dividends. While the other four stocks do, none of the group’s dividend yields are higher than 1%.
If you’re looking for growth and income, the JPMorgan Equity Premium Income ETF could be right for you. Since its inception in May 2020, the ETF has generated an average annual return of 12.4%. Its fees are also manageable, with an annual yield of 1.5%. expense ratio of 0.35%.
2. Vanguard Emerging Markets Government Bond Index ETF
THE Vanguard Emerging Markets Government Bond Index ETF (VWOB 0.60%) is not far behind with a 30-day SEC yield of 6.77%. As the name suggests, the fund focuses on obligations issued by governments in Emerging MarketsLike the JPMorgan Equity Premium Income ETF, the Vanguard Emerging Markets Government Bond Index ETF pays its distributions monthly.
This ETF holds 715 bonds with an average effective maturity of 12 years. While most of these bonds were issued in emerging markets (97.5%), 1.9% were issued in Europe, with the remainder issued in the Middle East or elsewhere.
One drawback of this Vanguard ETF is that bonds have not performed well in recent years. Since its inception in May 2013, the fund has generated an average annual return of about 2.6%.
However, you won’t have to worry about fees eating into your income and profits. The Vanguard Emerging Markets Government Bond Index ETF has a low annual expense ratio of 0.2%, well below the average expense ratio of 0.98% for similar funds.
3. iShares Preferred and Fixed Income ETFs
Black rock‘s iShares Preferred and Fixed Income ETFs (PFF 1.11%) pays a 30-day SEC yield of 6.33%. The fund focuses on preferred shares which generate income comparable to that which investors can obtain with high-yield bonds.
The iShares ETF holds 438 stocks. Its top holdings include Wells Fargo & Company L Series, Citigroup Capital XIII, Albemarle, Bank of AmericaAnd Apollo Global Management.
This fund tends to generate modest growth in addition to generating income. Since its inception in March 2007, its average annual return has been nearly 3.7%. However, the iShares ETF’s performance over the past 12 months has been much better.
The main drawback of this fund compared to the other two on the list is probably its cost. The annual expense ratio of the iShares Preferred and Income Securities ETF is 0.46%.
Randi Zuckerberg, former head of market development and spokesperson for Facebook and sister of Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Citigroup is an advertising partner of The Ascent, a Motley Fool company. Bank of America is an advertising partner of The Ascent, a Motley Fool company. Wells Fargo is an advertising partner of The Ascent, a Motley Fool company. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Keith Speights has positions in Amazon, Bank of America, JPMorgan Equity Premium Income ETF, Meta Platforms, and Microsoft. The Motley Fool has positions in and recommends Amazon, Bank of America, JPMorgan Chase, Meta Platforms, and Microsoft. The Motley Fool recommends Progressive and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a position in Amazon, Bank of America, JPMorgan Chase, Meta Platforms, and Microsoft. disclosure policy.