3 High-Yield Dividend ETFs That Will Perform the Best in 2026

"Investors with long-term plans are looking at higher-yielding assets because these are the ones that are positioned to perform the best when interest rates decline. The market tends to get hungry for yield when inflation is high, and Treasuries no longer yield a healthy amount. Right now, inflation is barely tolerable, and Treasury yields are holding up. However, prolonged rate cuts will lead to a thirst for more yield,"

"The FT Vest S&P 500 Dividend Aristocrats Target Income ETF is an income machine that uses elite dividend stocks plus a covered call overlay to squeeze out an exceptionally high yield. It tracks the Cboe S&P 500 Dividend Aristocrats Target Income Index, which produces an annual dividend yield significantly higher than the S&P 500. The "Dividend Aristocrats" component is what gives KNG its quality backbone. These are S&P 500 companies that have increased their dividends every year for at least 25 consecutive years."

Income investing gains urgency as interest rates trend lower in 2026, making high-yield dividend ETFs attractive for long-term plans. Investors favor higher-yielding assets that are poised to outperform when rate cuts increase demand for market yield versus Treasuries. Prolonged rate cuts will shift capital toward dividend-paying equities. The FT Vest S&P 500 Dividend Aristocrats Target Income ETF (KNG) combines long-running dividend growers with a covered-call overlay to produce exceptionally high income, though with muted capital appreciation and relatively higher downside exposure. KNG's Dividend Aristocrats focus provides quality and resilience while the covered-call strategy boosts monthly yield.

Read at 24/7 Wall St.