Healthy investment income can still be found in equity ETFs, even as fixed-income yields soar.
In fact, nine equity ETFs still offer attractive annual yields of more than 5%, according to a recent ranking organized by Financial Advisor magazine.
Using a dividend screener created by ETF Database (and its VettaFI analytics label), Financial Advisor researched the top 10 equity ETFs by annual dividend yield as of the morning of November 8, 2022.
The methodology excluded ETFs that did not pay quarterly dividends, and also omitted exchange-traded notes, leveraged ETFs, inverse ETFs, non-transparent ETFs and ETFs that reported taxes on K-1 forms instead of 1099s.
The resulting ranking created a list heavy on energy and international equity ETFs, with one exception.
Here are the top 10 ETFs by annual dividend yield.
10. Impact Shares YWCA Women’s Empowerment ETF (WOMN) 4.93%
The only ETF yielding less than 5% on this list, the Impact Shares' Women's Empowerment ETF, is also the only true thematic and ESG-oriented product in the top 10. While the fund offers an attractive yield, WOMN has returned -16.18% year over year.
9. Xtrackers MSCI All World ex US High Dividend Yield Equity ETF (HDAW) 5.07%
The first international ETF on the list, the Xtrackers fund has just $9.1 million in assets and carries a 0.2% expense ratio.
7. First Trust China AlphaDEX Fund (FCA) 5.1%
This fund tracks a Nasdaq constructed index that tracks and ranks Chinese stocks on growth and value factors and then uses a modified equal-weighting method to allocate among selections.
7. Franklin International Low Volatility High Dividend Index ETF (LVHI) 5.1%
A true smart beta ETF, this fund has $192.85 million in assets and carries a 0.4% expense ratio.
6. Cambria Foreign Shareholder Yield ETF (FYLD) 5.2%
This fund has effectively minimized volatility in 2022 by using an actively managed strategy. With $84 million in assets, the fund carries a 0.59% expense ratio.
5. First Trust Indxx Global Natural Resources Income ETF (FTRI) 5.26%
This fund focuses on the upstream segment of the natural resources sector across five broad categories: energy, materials, agriculture, water and timber.
4. VanEck Energy Income ETF (EINC) 5.39%
Another energy ETF, this fund currently has $33 million in net assets and carries a 0.46% expense ratio.
3. Xtrackers MSCI EAFE High Dividend Yield Equity ETF (HDEF) 5.47%
The is the second appearance of a fund from Deutsche Bank's Xtrackers platform. This one is a nearly $1 billion ETF that carries a 0.2% expense ratio.
2. iShares International Select Dividend ETF (IDV) 5.51%
BlackRock's only entry on this list has benefited from a pronounced swoon in developed market equities, exacerbated by the war in Ukraine. As a result, its dividend yield has inflated to over 5.5%.
1. Global X MLP & Energy Infrastructure ETF (MLPX) 5.54%
The highest yielding ETF on our list, this fund is affected by the ups and downs of energy markets. As energy prices increased over the past three years, so has the ability of master limited partnerships to pay out attractive yields.
