3 ETFs Offering Juicy Dividend Yields of 20% or Higher

As inflation remains high, investors are turning to high-yield ETFs like TSLY, XPAY, and SSK, which offer dividend yields ranging from 14% to over 100%. However, these returns often involve a significant portion of return of capital and come with notable risks.

The current U.S. inflation rate stands at 2.4% for the 12 months ending May 2025, indicating persistent inflation concerns. Despite this, the Federal Reserve has maintained its key interest rate around 4.3% during the June meeting, citing worries about inflation and the impact of new tariffs driving up consumer prices. With the focus on maintaining stability, investors are moving away from traditional bonds and mainstream dividend stocks towards high-yield ETFs offering double-digit returns to safeguard their capital.

1. YieldMax TSLA Choice Income Strategy ETF (TSLY)

The YieldMax TSLA Choice Income Strategy ETF (TSLY), part of the YieldMax ETFs family managed by Elevate Shares, trades on the NYSE Arca exchange. With a yearly yield of 129.63%, TSLY pays monthly dividends at a rate of $10.57 per share. However, a significant portion of these distributions is classified as return of capital rather than income. TSLY’s price stands at $7.75 as of July 2, 2025, showing a year-to-date decline of -45.69%.

Investment Strategy:

TSLY employs a synthetic covered call strategy, utilizing options to mimic exposure to Tesla stock’s price movements. By selling short-term call options, the fund generates income but caps the upside potential. The portfolio includes a mix of bonds, cash, stocks, and short stock positions, with no leverage used in its structure.

2. Roundhill S&P 500 Target 20 Managed Distribution ETF (XPAY)

The Roundhill S&P 500 Target 20 Managed Distribution ETF (XPAY), launched in October 2024, offers a dividend yield of 14.16% and aims for a 20% annualized distribution rate, primarily through return of capital. XPAY trades at $54.16 as of July 2, 2025, with total assets under management of approximately $34.6 million.

Investment Approach:

XPAY tracks the S&P 500 using deeply in-the-money FLEX Options on the SPDR S&P 500 ETF Trust, providing exposure to the index’s returns. The fund’s strategy focuses on tax efficiency, with distributions mainly comprising return of capital. XPAY is actively managed, with a management fee of 0.49%.

3. REX-Osprey Solana and Staking ETF (SSK)

The REX-Osprey Solana and Staking ETF (SSK) is the first U.S.-listed ETF to combine exposure to Solana with the blockchain’s staking rewards. Launched on July 2, 2025, SSK distributes rewards monthly, with all distributions initially classified as return of capital. The fund’s gross expense ratio is 0.75%.

Investment Strategy:

SSK holds Solana directly and engages in on-chain staking activities, aiming to maximize staking efficiency and reward capture. The ETF’s structure avoids leverage, focusing on actual staking rather than synthetic yield generation. SSK offers daily liquidity and secure custody of digital assets.

Conclusion

While pursuing yields exceeding 20% with TSLY, XPAY, and SSK presents an attractive opportunity, investors should be mindful of the associated risks and potential capital erosion. These ETFs showcase innovative income strategies in response to current market conditions, providing a unique avenue to combat inflationary pressures. As markets remain uncertain, these high-yield funds offer an alternative income solution worth considering.

On the date of publication, Ebube Jones did not hold any positions in the securities mentioned. All information in this article is for educational purposes only.