High-Yield ETFs for Decades of Passive Income

Launched in 2016, the Fidelity High Dividend ETF (FDVV) provides broad exposure to large- and mid-cap U.S. companies that not only pay high dividends but are also expected to grow them. With $6.9 billion in assets under management, the fund tracks the Fidelity Core Dividend Index and holds 121 stocks. Its yield of 2.98% is complemented by a low expense ratio of 0.16%, making it a cost-effective option for income-focused investors. The fund’s strategy offers ‘ultimate diversification’ across sectors, though it has a significant tilt towards technology, which constitutes 25.32% of the portfolio, followed by financials (19.21%) and consumer defensive stocks (12.59%).

FDVV’s top holdings read like a who’s who of growth and dividend stalwarts. Nvidia leads with a 6.32% allocation, followed by Microsoft (5.57%) and Apple (5.09%). This blend of high-growth tech giants with established dividend payers like Exxon Mobil, Broadcom, and Philip Morris creates a portfolio designed for both income and appreciation. This balanced approach has yielded strong results: FDVV is up 11.20% year-to-date and has delivered a 15.02% return over the past year. Its three-year return of 18.94% underscores its potential for robust long-term performance, trading recently at $55.58.

The Schwab U.S. Dividend Equity ETF (SCHD) takes a disciplined, quality-focused approach to dividend investing. With an attractive yield of 3.81% and a remarkably low expense ratio of 0.06%, SCHD is a behemoth in the space with $71.7 billion in assets. Its methodology is rigorous: it only selects companies that have increased their dividends for at least ten consecutive years. These companies are then scored based on cash-flow-to-total-debt, dividend yield, return on equity, and five-year dividend growth rates. The top 100 are selected and weighted by market capitalization, resulting in a portfolio of 103 proven dividend growers.

SCHD’s sector allocation differs markedly from FDVV, with its highest concentration in energy (19.23%) and consumer staples (18.81%), while technology makes up just 9% of the fund. This provides a defensive tilt, focusing on stable, cash-generative businesses. Its top 10 holdings, which account for 41% of the portfolio, include reliable names like AbbVie, Chevron, PepsiCo, and Home Depot. While its performance has been flat in 2025 and down 3% over the past 12 months, its longer-term track record is solid, with average annual returns of 9.34% over three years and 10.61% over five years, highlighting its consistency for patient investors.

For investors prioritizing current income above all, the JPMorgan Equity Premium Income ETF (JEPI) stands out with a formidable yield of 7.27%. JEPI employs a covered-call strategy to achieve this. The fund invests approximately 80% of its assets in equities from the Nasdaq 100 and uses the remaining 20% in equity-linked notes that sell call options on the index. This options strategy generates substantial premium income, which is passed on to investors as monthly dividends, making it a favorite for those seeking regular cash flow.

This high-yield strategy comes with a trade-off: JEPI is designed for income, not significant capital appreciation. Its expense ratio is higher at 0.35%, but the substantial yield compensates for the cost. The fund holds 124 stocks, with top allocations in information technology (15.5%), financials (13.3%), and industrials (11.8%). Its holdings include tech giants like Nvidia, Microsoft, Amazon, Visa, and Meta Platforms. While its net asset value (NAV) of $56.86 is down 1.10% year-to-date, it has gained 7.3% over five years. JEPI is explicitly a ‘high-yield, low-stress’ ETF ideal for investors who want to boost their bottom line with predictable monthly dividends without betting on dramatic stock price growth.

Together, FDVV, SCHD, and JEPI offer a spectrum of strategies for building a lifetime of passive income. FDVV provides a growth-oriented income play with heavy tech exposure, SCHD offers a quality screen for consistent dividend growers with a defensive tilt, and JEPI delivers high, monthly income through a sophisticated options strategy. Their yields of 2.98%, 3.81%, and 7.27% respectively all significantly outpace the S&P 500, and their diversified, low-cost structures mitigate the risks associated with individual stocks.

The key for long-term investors is to align these ETFs with their individual goals. For those with a longer time horizon seeking a balance of growth and income, FDVV and SCHD are compelling core holdings. For retirees or those needing immediate, substantial cash flow, JEPI serves as a powerful income engine. By understanding the distinct philosophies and trade-offs of each fund, investors can construct a resilient portfolio capable of generating steady income for decades to come, turning long-term planning into lasting financial security.