Top-Performing Dividend ETFs of 2H 2024 Yielding At Least 20%

Wall Street received positive news in December, with the Federal Reserve enacting a 25-basis point rate cut. However, the move did not keep the broader market rally intact, as hawkish Fed signals dampened investor sentiment. While the Fed projected only two rate cuts for 2025 (down from previous expectations of four), the broader market saw mixed reactions. Three rate cuts since September 2024 did not prevent U.S. Treasury yields from soaring, with the benchmark U.S. Treasury yield reaching 4.59% on December 23, 2024, compared to 3.95% at the start of the year.

The victory of Donald Trump in the U.S. Presidential election, along with market expectations of fiscal reflation, boosted risk-on sentiment and contributed to rising long-term Treasury yields. However, concerns over inflation due to Trump's policies may discourage the Fed from cutting rates frequently next year.

In this environment, high-dividend stocks and exchange-traded funds (ETFs) have been attractive, helping investors offset potential capital losses. Below, we highlight several dividend-focused ETFs that currently yield over 20%.

1. Kurr 23, 2024, compared to 3.95% at the start of the year.

The victory of Donald Trump in the U.S. Presidential election, along with market expectations of fiscal reflation, boosted risk-on sentiment and contributed to rising long-term Treasury yields. However, concerns over inflation due to Trump's policies may discourage the Fed from cutting rates frequently next year.

In this environment, high-dividend stocks and exchange-traded funds (ETFs) have been attractive, helping investors offset potential capital losses. Below, we highlight several dividend-focused ETFs that currently yield over 20%.

 v Yield Premium Strategy Tesla ETF (TSLP)

6-Month Performance: +72.0%

Annual Yield: 21.08%

Tesla (TSLA) stock surged about 135% over the past six months, propelled by optimism following President-elect Donald Trump’s victory and his perceived influence on Tesla’s future. Investors remain confident in the company’s long-term prospects, contributing to the strong performance of TSLP, a Tesla-focused ETF.

2. YieldMax MSTR Option Income Strategy ETF (MSTY)

6-Month Performance: +67.0%

Annual Yield: 73.21%

MicroStrategy (MSTR), the world’s largest Bitcoin holder, experienced significant gains, rising 142% over the last six months. MSTR joined the Nasdaq 100 index on December 23, 2024, which boosted its exposure in the tech-heavy market. The ETF’s stellar yield reflects the success of the cryptocurrency rally and MSTR’s pivotal role in the Bitcoin ecosystem.

3. YieldMax PYPL Option Income Strategy ETF (PYPL)

6-Month Performance: +40.9%

Annual Yield: 46.15%

PayPal (PYPL) gained 46% over the past six months, fueled by pro-cryptocurrency policies from the incoming Trump administration. With key appointments to positions like cryptocurrency czar and artificial intelligence leader, PayPal's leadership is poised to benefit from a less restrictive regulatory environment. This ETF is designed to generate high yields from its focus on PayPal and its associated options strategy.

4. YieldMax SQ Option Income Strategy ETF (SQY)

6-Month Performance: +31.2%

Annual Yield: 60.43%

Block (SQ) stock increased by 38% in the last six months, reflecting broader optimism in the fintech sector. The YieldMax SQ ETF uses an options strategy to generate monthly income, leveraging its position in Block to capture significant returns. The ETF has benefited from the company's growth and market interest in digital payment platforms.

5. ARK 21Shares Active Bitcoin Futures Strategy ETF (ARKA)

6-Month Performance: +30.9%

Annual Yield: 24.02%

Bitcoin prices saw a substantial 50% rise in the last six months, briefly touching the $100,000 mark in early December. Despite some volatility, the cryptocurrency surged back to the $107,000 level mid-month. Optimism surrounding a cryptocurrency-friendly regulatory environment under President-elect Trump and increasing mainstream adoption has fueled the rally, benefiting this actively managed Bitcoin futures ETF.

These high-yield dividend ETFs offer attractive returns in an environment marked by rising Treasury yields, inflation concerns, and a shifting market sentiment. They present compelling opportunities for income-seeking investors navigating a volatile market.