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Highest-Paying Dividend ETFs in the US (October 2026): 17 Funds Ranked by Yield

How we ranked them

Every figure here was pulled on October 6, 2026.

• Yield is the trailing 12-month yield: the cash each fund paid over the last year, divided by today's share price. It is a record of what was paid, not a promise.
• Total return is the one-year return including dividends.
• We reviewed 28 widely held US-listed dividend and equity-income ETFs. To make the ranking, a fund needed at least $300 million in assets.
• We split the list in two, because the cash comes from two very different places. Dividend ETFs pass along dividends paid by the companies they own. Option-income ETFs pay out money earned by selling call options.

For comparison, the S&P 500 (through VOO) yields 1.04%.

The highest-paying dividend ETFs, ranked

These eight funds get their payouts from the dividends of the stocks they hold.

Source: StockAnalysis fund data, October 6, 2026.

What each fund owns

1. KBWD (15.9%). Around 39 high-yielding financial companies, mostly business development companies (BDCs) and mortgage REITs. These businesses borrow money to lend it out, so they pay large dividends and cut them when credit turns. The 5.39% expense ratio looks alarming. Most of it is "acquired fund fees," the operating costs of the BDCs inside the fund, which accounting rules require it to report. It is still the weakest performer on this list: down 9.74% over the past year with dividends included.

2. SDIV (9.4%). More than 100 of the highest-yielding stocks from around the world, held in roughly equal amounts. It is diversified by country and sector, but selecting only by yield tends to pick up companies in trouble.

3. KBWY (9.0%). About 30 small and mid-sized real estate investment trusts, weighted by yield. It is concentrated in one sector and sensitive to interest rates.

4. DIV (6.7%). 50 high-yielding US stocks chosen for lower volatility, equal-weighted. It is the highest-yielding fund on this list that stays US-only and multi-sector.

5. IDV (5.8%). About 130 dividend payers in developed markets outside the US. It had the best one-year total return in this group, at 20.75%. Foreign withholding taxes and currency moves affect what you keep.

6. SPHD (5.1%). The 50 stocks in the S&P 500 that combine high yield with low volatility. It is heavy in utilities, real estate and consumer staples. It pays monthly, but its one-year total return was only 2.25%.

7. PEY (4.6%). 50 companies that have raised their dividends for at least 10 years in a row, weighted by yield.

8. SPYD (4.5%). The 80 highest-yielding stocks in the S&P 500, equal-weighted. At 0.07%, it is the cheapest fund here by a wide margin.

The option-income ETFs that pay even more

These funds own stocks and sell call options against them, or use similar option strategies. The option premium is paid out every month. The payouts are large, but they are not dividends in the usual sense, and the funds give up part of the market's upside to earn them. Our full guide: covered call ETFs explained.

Source: StockAnalysis fund data, October 6, 2026.

Over the same 12 months, a plain S&P 500 fund (VOO) returned 17.88%. Several of these funds kept pace this year. In a sharp rally they usually lag, because the options they sell cap the gains.

The 90% and 130% "yields" you should treat differently

Some single-stock and "ultra" option funds advertise far bigger numbers. They are not dividend funds, and the headline yield says little about what you earn.

Source: StockAnalysis fund data, October 6, 2026.

MSTY paid out more than its current share price over the past year, and investors still lost almost half their money. The share price fell faster than the cash came in. This is the clearest example of why yield and return are different things.

What $10,000 pays in a year

Based on the trailing yield, before taxes. Payouts change, so treat this as a guide.

To run these numbers on what you actually own, use the Dividend Tracker. To see how regular contributions grow over time, try the DCA calculator.

Why the highest yield is not the best return

Compare the top of the ranking with some lower-yielding dividend funds over the same year:

One year is a short window and the order will change. The lesson holds over longer periods too. Yield rises when a price falls, so the highest-yielding stocks are often the ones the market trusts least. Funds that select only by yield end up owning a lot of them.

SCHD, HDV and VYM are covered in the 5 best US dividend ETFs for beginners.

Which fund stands out for what

This is not a recommendation. It is how the numbers sort.

• Highest yield from a broad, low-cost fund: SPYD (4.52%, 0.07% fee).
• Highest yield with monthly pay from S&P 500 stocks: SPHD (5.10%).
• Highest yield from US stocks across sectors: DIV (6.68%).
• Highest yield with the best one-year total return: IDV (5.79%, +20.75%), with international and currency risk.
• Highest raw yield: KBWD (15.93%), with the most risk and a negative one-year return.
• Largest option-income funds: JEPI ($45.3B) and JEPQ ($44.5B), both at a 0.35% fee.

Five checks before you buy for yield

1. Look at total return, not just yield. A fund that pays 10% and falls 12% lost you money.
2. Check the price history. A share price that slides year after year means the payout is being funded by your own capital.
3. Read what it holds. KBWD is lenders. KBWY is small REITs. SPHD is utilities and staples. You are buying those sectors.
4. Compare the fee to the yield. A 0.60% fee on a 4.5% yield takes more than an eighth of your income. See ETF expense ratios.
5. Check the dividend record. Has the payout been rising, flat or cut? The Dividend Tracker charts five years of dividend growth for each holding.

Taxes in brief

• Qualified dividends from US companies are taxed at 0%, 15% or 20%, depending on your income.
• REIT and BDC payouts (KBWY, KBWD) are mostly ordinary income, taxed at your regular rate.
• JEPI and JEPQ income is mostly ordinary income too.
• SPYI and QQQI use index options that receive different tax treatment, and part of their payout is often classed as return of capital.
• In an IRA, Roth IRA or 401(k), none of this is taxed when it is paid. That makes these accounts a natural home for high-yield funds.

Fund companies report the exact breakdown each year on Form 1099-DIV.

The bottom line

The highest-paying dividend ETFs in the US yield between 4.5% and 16% right now, and option-income funds add another group between 6% and 13%. The safest of the high payers are the broad, cheap ones: SPYD and SPHD. The biggest numbers come from narrow funds that have not rewarded investors in total. Decide how much income you need, then pick the lowest-risk fund that gets you there. If you reinvest the payouts, set up a DRIP.

Investing from Canada? See the highest-paying dividend ETFs in Canada.

Frequently asked questions