3 Top ETFs Yielding 3% or More to Buy and Hold for Passive Income

2 days ago 2

Matt DiLallo, The Motley Fool

Wed, January 21, 2026 astatine 4:50 AM CST 5 min read

The Schwab U.S. Dividend Equity ETF presently has a output approaching 4%.
The Vanguard Total Bond Market ETF offers a output of much than 4%.
The JPMorgan Equity Premium Income ETF has paid an income output of much than 8% implicit the past year.
10 stocks we similar amended than Schwab U.S. Dividend Equity ETF ›

Exchange-traded funds (ETFs) are immoderate of the astir passive investments you tin make. They tin supply you with an instantly diversified portfolio of stocks. As a result, they tin beryllium fantabulous ways to make passive income.

Here are 3 apical dividend-focused ETFs to bargain for passive income.

A pad with passive income written connected it.

The Schwab U.S. Dividend Equity ETF (NYSEMKT: SCHD) tracks an scale (The Dow Jones U.S. Dividend 100 Index) designed to measurement the show of high-yielding stocks with a accordant grounds of paying dividends. It screens companies based connected respective dividend quality characteristics, including dividend output and five-year dividend maturation rate. In essence, the Schwab U.S. Dividend Equity ETF holds 100 of the highest quality, high-yielding dividend stocks.

The money has a trailing 12-month dividend output of 3.8%. Put different way, each $10,000 invested into this ETF would make astir $380 of yearly passive income. The ETF besides has a debased expense ratio of 0.06%, enabling investors to support much of the dividend income generated by its holdings.

A company's dividend output is lone portion of the equation. The money besides focuses connected companies with beardown dividend maturation way records. The fund's holdings person accrued their dividend payments by an mean of much than 8% annually implicit the past 5 years. As a result, the ETF's organisation payments thin to emergence each year.

Investing successful bonds is simply a large mode to make passive income. They typically marque fixed involvement payments doubly a year.

The Vanguard Total Bond Market ETF (NASDAQ: BND) makes it casual to put successful income-producing bonds. The money aims to supply wide vulnerability to high-quality bonds issued by investment-grade-rated creditors. It presently holds implicit 11,400 bonds issued by authorities entities and corporations. This diversification helps further little the hazard of a recognition default impacting your income.

The money makes monthly income distributions to investors. It presently has an mean yield to maturity of 4.3% with an mean effectual maturity of 8 years. As a result, it should nutrient relatively dependable income for years to come. This ETF besides has an ultra-low disbursal ratio (0.03%). It's an perfect money for investors seeking a precise low-risk, comparatively fixed-income stream.