The Nasdaq has enjoyed an incredible recovery run off the Trump tariff-fueled sell-off that dragged stocks into a correction earlier in the year. Undoubtedly, tech and AI stocks continue to be in the driver’s seat, but they’re certainly not the only game in town. In the background, a handful of higher-yielding stocks have been gaining ground after a few years of relative underperformance. And as their relatively quiet comeback continues, I do think that some higher-yielding names could have room to run and a bit less downside risk once the tech trade runs into its next inevitable roadbump.
Let’s check in on two ETF (Exchange Traded Fund) products that have actually kept a good pace with the Nasdaq 100 in the past month (the first of three innings of the third quarter).
While this recent momentum shouldn’t be a top reason to pick up an ETF or individual name, I do think that such strength and modest valuations could cause such momentum to carry into the back half of the year and perhaps into the first half of 2026. Indeed, improving fundamentals and their still-muted multiples, I believe, could be supportive of a rally that’s less tied to the next direction of the tech sector.
So, whether you’re an income investor seeking more yield than the broad market or a contrarian who’s looking to rotate back into value, the following ETFs, I think, look tempting as we march closer to September (and October), two of the scarier and choppier months in markets. Of course, steering clear of stocks due to seasonality is not a good move. In any case, being ready for a pick-up in choppiness after one of the least volatile past months in a while seems shrewd.
Fidelity High Dividend ETF (FDVV)
First up, we have the Fidelity High Dividend ETF (NYSEARCA:FDVV | FDVV Price Prediction), which is one of my favorite income-focused ETFs on the market, thanks to its impressive balance between yield and long-term growth.
The 3.2%-yielding ETF has a good amount (but not excessive, as is the case with the Nasdaq 100) of exposure to the best of the Magnificent Seven, in addition to other fast-growing firms capable of growing their dividends at a high single-digit or low double-digit percentage pace every year.
Looking deeper into the FDVV, you’ll also see some big banks (many of which have respectable yields and share price momentum), as well as big oil firms and deeply undervalued consumer staple stocks that happen to sport hefty yields due to their prior plunges.
In short, if you want mega-cap strength with proven dividend growers and a side of deeply-discounted high-yielding value plays, the FDVV is a perfect bet. It’s a rather unorthodox mix that works for investors seeking upfront yield, appreciation, and dividend growth from established large-cap companies with (mostly) reasonable valuations.
After gaining 4.2% in the past month, the FDVV is off to a flying start to the third quarter, topping the Nasdaq 100’s hot 3.3% gain. Can the FDVV’s impressive run continue into year’s end? Time will tell. Either way, I think the ETF has a potent lineup that I believe has a better chance of steadily outpacing the broad market, especially if we’re dealt a correction by October.
JPMorgan Nasdaq Equity Premium Income ETF
The JPMorgan Nasdaq Equity Premium Income ETF (NASDAQ:JEPQ) is a high-yielding investor’s dream with its current 11.2% yield. Of course, like with most covered call ETFs, investors should ready themselves for yield volatility since the yield on such ETFs won’t remain static. Premiums on call options change over time, and with that, so too will the yield at any given instance.
In any case, I view the JEPQ as a very intriguing play ahead of the volatility season. Indeed, when volatility goes up, so too do options premiums. Of course, it’s tough to tell if the Nasdaq 100 is headed higher or lower from here. But with the JEPQ, you’ll be paid to wait while enduring much less volatility (0.83 beta, which entails less correlation to the broad market) for doing so.
So, if you’re cautiously optimistic on the Nasdaq 100 and are seeking something that can better handle a volatility pick-up that could come with the fall season, the JEPQ is tough to count out. Shares are up 1.7% in the past month, putting the premium income ETF just short of the Nasdaq 100 index. That said, if you’re looking for a volatility spike, I’d much rather be in the JEPQ than the Nasdaq 100, and not just for the income.
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