Got $2,000? These High-Yield ETFs Could Turn Into Passive Income Superstars

Ever since President Trump announced his reciprocal tariff trade policy, the Dow Jones Index and the S&P 500 Index have both taken sizable drops. Needless to say, many investors and retirees have seen the commensurate impact on their portfolios, which have given them cause for consternation.

Less impacted by stock market volatility are those investors who have focused their holdings on defensive stocks, real estate, and fixed income assets.The income stream and reduced sleepless nights make a strong case for diverting at least a partial allocation into these types of asset classes.

Even if looking to invest as small an amount as $2,000, the menu for one to find a diversified investment vehicle to suit their requirements is huge. 24/7 Wall Street has a gigantic database of dividend oriented stocks, ETFs, REITS, and other income producing investments. Four that might appeal to a broad range of investors are:

• FT Vest S&P 500 Dividend Aristocrats Target Income ETF (CBOE: KNG) 
• Schwab US Dividend Equity ETF (NYSE: SCHD)
• YieldMax Bitcoin Option Income Strategy  (NYSE: YBIT)
• T-Rex 2X Long NVIDIA Daily Target ETF (CBOE: NVDX)

These ETFs all have higher yields than one might expect, and can thus be excellent income based investments, in addition to any potential capital appreciation upsides once a market downturn correction has run its course. 

FT Vest S&P 500 Dividend Aristocrats Target Income ETF (CBOE: KNG)

Founded in 1991 by Robert Van Kampen, First Trust is headquartered in Wheaton, Illinois. After founding previous firms bearing his name, Van Kampen founded investment banking firm Nike Securities, which later acquired the Unit Investment Trust assets of Clayton, Brown, & Associates. The businesses were subsequently combined under the First Trust brand following Van Kampen’s death in 1999. Its menu of ETFs are popular with individual investors, notably because First Trust deploys actual customer service reps to deal with customer inquiries, eschewing the use of computerized, pre-programmed call responses. 

Dividend Aristocrat stocks are those companies with a history of paying increased dividends for a consecutive minimum of 25 years. Companies with the wherewithal to annually increase a dividend for over 2 decades or more inevitably have a strong business model with savvy management and a sufficient profit growth trajectory to afford the dividend hikes. Unsurprisingly, the vast majority of US Dividend Aristocrat stocks are members of the S&P 500.

The FT Vest S&P 500 Dividend Aristocrats Target Income ETF is an Exchange Traded Fund  that is geared to track the CBOE S&P 500 Dividend Aristocrats Target Income Index Monthly Series. However, while most Exchange Traded Funds are passively managed and automatically make changes to mirror those of the underlying index, KNG also deploys a covered call option writing strategy to boost returns. 

As a result, FT Vest S&P 500 Dividend Aristocrats Target Income ETF will likely pay a higher annual dividend than what its underlying index might automatically calculate out to total. A snapshot profile of KNG appears as thus:

Sector wise, KNG’s top 5 heaviest weighted industrial areas are:

1. Consumer Staples – 24.37%
2. Industrials – 19.88%
3. Financials – 13.32%
4. Materials – 10.63%
5. Health Care – 10.25%

The top 5 weighted holdings in KNG are:

1. Con Edison – 1.90%
2. Coca-Cola – 1.79%
3. J.M. Smucker – 1.73%
4. Brown & Brown Inc. – 1.72%
5. Atmos Energy – 1.71%

A $2,000 investment made at inception would be worth $3,227.16 at the market price time of this writing, not including all of the dividend income.

Schwab US Dividend Equity ETF (NYSE: SCHD)

With over $10 trillion Assets Under Management, Charles Schwab is one of largest asset managers on the planet, ranking behind BlackRock and Vanguard, and going neck and neck with Fidelity. Schwab’s catalog of funds for individual and institutional investors have achieved notice for their performance, usually equaling and occasionally surpassing its rivals. 

The Schwab US Dividend Equity ETF is an exchange traded fund that is designed to track The Dow Jones U.S. Dividend 100 Index. Passively managed, SCHD’s underlying index draws from a comparable, but slightly different collection of dividend paying stocks than the Dividend Aristocrats of KNG. 

Sector wise, SCHD’s top 5 heaviest weighted industrial areas are:

1. Financials – 18.73%
2. Health Care – 16.67%
3. Consumer Staples – 14.37%
4. Industrials – 13.28%
5. Energy – 11.67%

The top 5 weighted holdings in SCHD are:

1. Verizon Communications – 4.47%
2. Coca-Cola – 4.44%
3. Altria Group – 4.24%%
4. ConocoPhillips – 4.23%
5. Lockheed Martin – 4.21%

A $2,000 investment made 10 years ago in SCHD that reinvested dividends would have a cumulative value of $5,855.40.

YieldMax Bitcoin Option Income Strategy (NYSE: YBIT)

Reflecting the cutting edge of fintech and its applications in serving the investing public, YieldMax was formed in 2024.

As the most recognized decentralized financial product and cryptocurrency, Bitcoin has captured the imagination of millions of people looking for an alternative asset class that can serve as a store of wealth in the digital world. It has become so popular that President Trump has even announced that the US government would create a Bitcoin reserve. 

The YieldMax Bitcoin Option Income Strategy is an ETF that is a high risk, high reward platform predicated on option trading of Bitcoin cryptocurrencies. YBIT doesn’t acquire any BTC directly; instead, its strategy is to generate income from trading options against Bitcoin’s intrinsic volatility and bullish trajectory. Since it doesn’t hold onto assets for growth, YBIT remits the bulk of its gains back to shareholders, making it an extremely high yielding investment. However, if the options bet the wrong way, significant losses can be generated in the ETF in a matter of hours. 

Given the volatile nature of Bitcoin and the inconsistency of day trading returns, the high yield is a calculation based on projected returns relative to market price, but are not secured in the same way that Dividend Aristocrat stocks or bonds can better assure their respective yield payouts.

T-Rex 2X Long NVIDIA Daily Target ETF (CBOE: NVDX)

Nvidia’s (NASDAQ: NVDA) synonymous connection with Artificial Intelligence has been rocket fuel that has sent its stock soaring to a market cap over $3 trillion at one point, earning it a membership spot in the elite tech stock “Magnificent 7”. 

REX Shares is another ETF fintech provider, specializing in alternative strategy ETFs and ETNs. Many of them also utilize option trading strategies that can generate very high returns, but also contain commensurately high levels of risk.  

REX Shares’ approach towards capitalizing on the volatility of Nvidia is the T-Rex 2X Long NVIDIA Daily Target ETF. By using the leverage afforded with options, NVDX is designed to magnify NVDA’s daily performance by 200%.  While NVDX has paid a year-end dividend since its inception, it has not declared any ex-dividend date so far for 2025. 

The different choices available now for investors seeking income have broadened considerably, as innovative approaches have found favor with those on the more adventurous side. This dispels the notion that income oriented investments are solely the province of the retired and risk averse, so one should definitely conduct their own due diligence on any prospective ETF or security for their own portfolios. 

The post Got $2,000? These High-Yield ETFs Could Turn Into Passive Income Superstars appeared first on 24/7 Wall St..