There’s no query that among the finest methods to construct wealth over the lengthy haul is by producing passive revenue, particularly when that revenue is dependable and doesn’t require fixed monitoring or lively decision-making. That’s why a few of the greatest investments you should buy for passive revenue in 2026 are high-yield exchange-traded funds (ETFs).
Proudly owning investments that earn you dependable passive revenue is at all times necessary, however in 2026, it issues greater than ordinary.
Between geopolitical tensions, uncertainty round rates of interest, and markets which have already rallied laborious in sure areas, it is smart to contemplate shoring up your portfolio and shopping for higher-yield investments that may assist mitigate volatility.
ETFs make this even simpler as a result of they provide instantaneous diversification, decrease single-stock danger, and a extra hands-off solution to construct revenue.
That’s why if you happen to’re seeking to increase your passive revenue in 2026 with out taking up pointless danger, two of my favorite high-yield investments aren’t really shares; they’re high-quality ETFs.
The most effective high-yield ETFs to purchase for passive revenue in 2026
For those who’re seeking to increase the passive revenue your portfolio generates in 2026, there’s no query that among the finest ETFs to contemplate is BMO Canadian Excessive Dividend Lined Name ETF (TSX:ZWC).
There are two most important explanation why the ZWC ETF is a prime choose for dividend buyers in the present day. First, it holds a diversified portfolio of high-quality Canadian dividend-paying shares throughout sectors like financials, utilities, telecommunications, and power. These are mature, well-established companies that already generate robust and predictable money circulation.
That’s important, as a result of these shares on their very own already present buyers with sustainable dividends and excessive yields.
Why the ZWC ETF is particularly made for passive-income seekers, although, isn’t simply because it owns a portfolio of high-quality dividend shares. The opposite most important motive is the coated name technique it makes use of.
With the intention to increase the revenue, it returns to buyers, the fund writes coated calls on a portion of its holdings, accumulating possibility premiums in trade for giving up some upside if these shares rally sharply.
These premiums are then added to the dividends the underlying shares already generate, which is what permits the ZWC to pay a considerably increased distribution than a conventional dividend ETF.
The fund additionally fees a better supervisor expense ratio (MER) due to this technique, however even with a MER of 0.72%, the ZWC nonetheless gives buyers a internet yield of greater than 5.1% in the present day, displaying why it’s among the finest high-yield ETFs that passive revenue seekers should purchase in 2026.
And whereas buyers can select to purchase coated name ETFs at any time, they’re significantly enticing looking forward to the remainder of 2026.
With a lot uncertainty and lots of shares already buying and selling at or above their truthful worth, markets might grind increased, however a large bull run isn’t assured. In that type of surroundings, buying and selling some upside for rapid, dependable revenue could make lots of sense.
The most effective high-income ETFs for relative security
Unsurprisingly, along with the ZWC ETF, one other prime high-yield fund I like in 2026 for lots of the identical causes is BMO Lined Name Canadian Banks ETF (TSX: ZWB).
The ZWB ETF is structured precisely just like the ZWC, besides it focuses completely on Canada’s main banks. That is key as a result of financial institution shares are well-known as a few of the greatest dividend shares to personal for the lengthy haul, since Canadian banks are a few of the most steady and dominant monetary establishments on the planet.
They function in a extremely regulated surroundings, generate huge quantities of recurring income, and have a protracted historical past of paying dividends via a number of financial cycles.
The ZWB ETF is good as a result of it gives publicity to all the main Canadian banks directly, which helps cut back single-bank danger whereas nonetheless benefiting from the sector’s general energy. And with its coated name technique, the ETF at the moment gives a internet yield of 4.7%.
So, if you happen to’re going to commerce off some capital good points potential for increased revenue, 2026 seems like precisely the type of 12 months the place that trade-off could make sense.
