Hunting for Gold: Which ETF Has the Highest Dividend Yield in 2025?

Are you tired of watching your investments crawl along while inflation eats away at your savings? Me too! That’s why I’ve been obsessing over dividend ETFs lately. If you’re looking to generate some serious passive income from your investments, you’ve probably wondered which ETF has the highest dividend yield?

I’ve done the legwork for you, digging through the latest data as of November 2025 to find those juicy high-yield dividend ETFs that could potentially pad your pocket with regular income.

The Current Dividend King: KBWY Leads the Pack

According to the latest data from NerdWallet, the Invesco KBW Premium Yield Equity REIT ETF (KBWY) currently wears the crown with an impressive 1005% dividend yield. That’s seriously high—like, “Is this for real?” high

But before you rush to pour your life savings into KBWY, let’s take a deeper look at what’s available in the high-dividend ETF space and what you should consider before investing.

Top 7 High-Dividend ETFs (November 2025)

Here are the current highest-yielding dividend ETFs based on the latest market data:

Just looking at these numbers, I know you might be ready to dump everything into KBWY. Hold your horses! There’s more to consider than just the yield percentage.

Why High Dividend ETFs Aren’t Always What They Seem

Whenever I see yields above 6%, my spidey senses start tingling. Here’s what you need to understand about those super-high yields:

1. Higher risk profile – That 10% yield from KBWY doesn’t come without significant risk. As a REIT-focused ETF, it’s heavily exposed to real estate market fluctuations.

2. Dividend sustainability – Sometimes a high yield is the result of the ETF’s price falling dramatically while the dividend hasn’t yet been cut. This can create temporarily inflated yields that won’t last.

3. Sector concentration – Many high-yield ETFs are heavily concentrated in specific sectors like REITs, energy, or utilities, which reduces diversification.

4. Expense ratios matter – Even with high yields, a high expense ratio can eat into your returns. Always check what you’re paying in fees.

Understanding Why Dividend ETFs Make Sense

Despite the warnings, dividend ETFs can be fantastic investment vehicles. Here’s why we love them:

• Instant diversification – Instead of picking individual dividend stocks, an ETF gives you exposure to dozens or hundreds in one purchase.
• Regular income stream – Dividends can provide reliable cash flow, especially valuable during retirement.
• Potential stability – Dividend-paying companies are often more established and stable than growth-focused firms.
• Reinvestment power – You can reinvest those dividends to take advantage of compound growth over time.

How to Choose the Right Dividend ETF

When I’m looking at dividend ETFs, I don’t just chase the highest yield. Here’s my checklist:

1. Look Beyond the Yield

The dividend yield is just the beginning. I also check:

• 5-year returns – How has the ETF performed over time?
• Expense ratio – Lower is generally better. Look for under 0.50%.
• Assets under management (AUM) – Larger funds tend to be more stable.
• Dividend growth history – Is the dividend increasing over time or just high right now?

2. Consider the ETF’s Holdings

What companies make up the ETF? Are they:

• Large caps – Generally more stable
• Mid or small caps – Potentially higher growth but also higher risk
• Sector-specific or broadly diversified – More sectors = more diversification

3. Match the ETF to Your Investment Goals

Different dividend ETFs serve different purposes:

• Income now – If you need cash flow immediately, higher current yields might be priority.
• Income growth – For long-term investors, dividend growth rate may matter more than current yield.
• Tax efficiency – Some dividend ETFs are more tax-efficient than others.

Can You Actually Live Off ETF Dividends?

This is the million-dollar question, literally! Can you retire and live off dividend ETF income?

It’s possible, but you’ll need to do the math carefully. Using the 4% rule as a general guideline:

For a $1 million portfolio invested in an ETF yielding 4%, you’d generate about $40,000 in annual dividend income. Is that enough for your lifestyle? Don’t forget to consider:

• Social Security benefits
• Pension income
• Other investment income
• Tax implications
• Inflation over time

For most people, dividend ETFs work best as part of a broader income strategy rather than the sole income source.

Real-World Example: What $100,000 in KBWY Would Generate

Let’s put some real numbers to this. If you invested $100,000 in KBWY with its current 10.05% yield:

• Annual dividend income: Approximately $10,050
• Monthly income: About $837.50

But remember, that high yield comes with higher risk and potential volatility. The ETF’s principal value could fluctuate significantly.

Potential Red Flags with Ultra-High Yield ETFs

When evaluating ETFs like KBWY with its 10%+ yield, watch for these warning signs:

• Recent significant price drops – Which artificially inflate the yield percentage
• Declining dividend payments – If the actual dollar amount paid is decreasing
• Extreme sector concentration – Like being 100% in REITs or energy
• Small fund size – Which might indicate less stability
• High expense ratios – Which eat into your returns

My Personal Strategy with Dividend ETFs

I don’t put all my eggs in the highest-yielding basket. Instead, I blend different types:

1. Core dividend ETFs – Like SPYD (4.64% yield) for stability
2. Higher-yield satellite positions – Smaller allocations to ETFs like KBWY (10.05%)
3. Dividend growth ETFs – Which focus on companies increasing dividends over time

This way, I get some high current income while also positioning for long-term growth.

How to Buy Dividend ETFs

Ready to add some high-dividend ETFs to your portfolio? Here’s how:

1. Open a brokerage account if you don’t already have one
2. Research dividend ETFs using the criteria we’ve discussed
3. Compare expense ratios across similar ETFs
4. Check trading volume to ensure liquidity
5. Consider dollar-cost averaging rather than investing all at once

Most online brokers now offer commission-free ETF trading, making it easy and cost-effective to build your dividend portfolio.

Final Thoughts: The Highest Yield Isn’t Always the Best Choice

While KBWY currently holds the crown for highest dividend yield at 10.05%, that doesn’t automatically make it the best choice for every investor. The “best” dividend ETF depends on your:

• Investment timeline
• Risk tolerance
• Income needs
• Tax situation
• Overall portfolio strategy

For some investors, a more moderate yield from a diversified ETF like SPYD (4.64%) might actually deliver better total returns with less volatility.

Remember that crazy-high yields often come with crazy-high risks. Don’t get blinded by double-digit percentages without understanding what’s behind them.

But with careful research and a clear investment strategy, dividend ETFs can be powerful tools for generating income while maintaining growth potential in your portfolio. Whether you’re looking to supplement your current income or build a retirement cash flow machine, these dividend powerhouses deserve a place in your investment toolkit.

What’s your experience with dividend ETFs? Are you focusing on current yield or dividend growth? I’d love to hear your thoughts!

Some of the ETFs with the highest dividend yields include options-income ETFs like the YieldMax MRNA Option Income Strategy ETF (MRNY), and real estate investment trusts (REITs) like the Invesco KBW Premium Yield Equity REIT ETF (KBWY).

To make

$\$1,000$

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yield would require about

$\$300,000$

to generate

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per month, while a portfolio with a

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yield would require approximately

$\$400,000$

.