At a glance
KBWD charges 5.39% a year, above the 0.98% average of the 6 funds most like it (the most expensive of 7). It has $426.6M in assets, the 3rd largest of that group; it paid 16.13% of its price in distributions over the past 12 months, monthly. Over the past year it returned −11.4% with distributions reinvested (S&P 500: +11.5%), 5th of those 7 funds; over three years it returned +5.7% a year. At its worst it fell 56.1% in the 2020 crash (S&P 500: 33.7%) and 29.9% in the 2022 bear market (S&P 500: 24.5%), and was back at its earlier high 13 months and 21 months after the lows. Its ten largest positions make up 36.9% of the fund, out of 40 in all.
The short version
Invesco KBW High Dividend Yield Financial ETF (KBWD) tracks the KBW Nasdaq Financial Sector Dividend Yield Index. The index holds about 40 high-yielding US financial companies, many of them business development companies and mortgage REITs. The fund pays monthly, and its trailing 12-month yield was 16.13% as of October 27, 2026. The trade-offs are a 5.39% total expense ratio, the highest among similar funds, and sharp price swings.
Price history
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KBWD -11.4% over the year to Oct 27, 2026, total return with distributions reinvested.
How it has behaved
| YTD | 1 yr | 3 yr | 5 yr | 10 yr | Since start | |
|---|---|---|---|---|---|---|
| KBWD official prospectus, to Dec 31, 2024 | — | +4.43% | — | +2.56% | +4.23% | — |
| KBWD price data to Oct 27, 2026 | -13.1% | -11.4% | +5.7% | -1.8% | +3.3% | +4.9% |
- Over the year to Oct 27, 2026, KBWD returned -11.4%, 5th of 7 among similar funds.
- Its 5-year annualized return was -1.8% and its 10-year +3.3%.
- In the 2020 COVID crash it fell 56.1% and regained its old high 13.1 months after the low.
- Its worst full calendar year was 2022 (-19.1%); its best was 2021 (+31.9%).
- The deepest fall in its price history was 58.5% (Feb 20, 2020 to Apr 3, 2020), recovered by Apr 26, 2021.
Show as a table
| Year | Price data | Prospectus (official) |
|---|---|---|
| 2026 (to date) | -13.1% | — |
| 2025 | +5.8% | — |
| 2024 | +4.3% | +4.43% |
| 2023 | +20.2% | +19.98% |
| 2022 | -19.1% | -18.99% |
| 2021 | +31.9% | +31.85% |
| 2020 | -15.5% | -15.21% |
| 2019 | +21.1% | +20.56% |
| 2018 | -8.9% | -8.78% |
| 2017 | +12.2% | +11.93% |
| 2016 | +20.4% | +20.62% |
| 2015 | -10.2% | -10.20% |
| 2014 | +8.3% | — |
| 2013 | +18.3% | — |
| 2012 | +16.3% | — |
| 2011 | -0.6% | — |
| 2008 financial crisis stocks fell Oct 9, 2007 – Mar 9, 2009 | Before this security existed |
|---|---|
| 2020 COVID crash stocks fell Feb 19, 2020 – Mar 23, 2020 | Lost 55.8% over that stretch · deepest drop along the way 56.1%, back to its old high 13.1 months after the low |
| 2022 bear market stocks fell Jan 3, 2022 – Oct 12, 2022 | Lost 26.2% over that stretch · deepest drop along the way 29.9%, back to its old high 21.2 months after the low |
Dividends and income
Show as a table
| Year | Per share | Change |
|---|---|---|
| 2026 (to date) | $1.4100 | |
| 2025 | $1.7800 | -2.7% |
| 2024 | $1.8300 | +1.1% |
| 2023 | $1.8100 | +6.5% |
| 2022 | $1.7000 | +15.6% |
| 2021 | $1.4700 | -7.5% |
| 2020 | $1.5900 | -16.8% |
| 2019 | $1.9100 | +2.1% |
| 2018 | $1.8700 | -11.0% |
| 2017 | $2.1000 | +6.1% |
| 2016 | $1.9800 | +5.3% |
| 2015 | $1.8800 | -10.9% |
| 2014 | $2.1100 | +9.3% |
| 2013 | $1.9300 | -7.7% |
| 2012 | $2.0900 | -26.4% |
| 2011 | $2.8400 |
Living on KBWD: its income record, cuts, and how much a $1,000 monthly income takes →
What's inside
As of May 31, 2026, the fund held 40 securities; the ten largest made up 36.87% of assets. It also reported 30.89% in a money-market fund, most likely cash collateral from lending out shares rather than uninvested money.
| Holding | Weight | |
|---|---|---|
| FS KKR Capital Corp., BDC | 4.14% | |
| Orchid Island Capital, Inc. | 4.08% | |
| New Mountain Finance Corp., BDC | 4.05% | |
| Invesco Mortgage Capital Inc. | 3.69% | |
| Trinity Capital Inc., BDC | 3.64% | |
| Two Harbors Investment Corp. | 3.64% | |
| ARMOUR Residential REIT, Inc. | 3.55% | |
| PennantPark Floating Rate Capital Ltd., BDC | 3.51% | |
| MidCap Financial Investment Corp., BDC | 3.33% | |
| Carlyle Secured Lending, Inc., BDC | 3.24% | |
| Goldman Sachs BDC, Inc., BDC | 3.23% | |
| Dynex Capital, Inc. | 3.14% | |
| MFA Financial, Inc. | 3.13% | |
| Blue Owl Capital Corp., BDC | 3.03% | |
| Adamas Trust, Inc. | 2.88% |
By country
United States 99.41%By asset type
Stocks 99.41%What changed recently
- Over the three months to May 31, 2026, investors added a net $8.6M (creations minus redemptions, per the N-PORT report).
- Monthly total returns reported for that quarter: -2.84%, +7.60%, -5.00%.
How it works
KBWD is an index fund. It follows the KBW Nasdaq Financial Sector Dividend Yield Index, which Keefe, Bruyette & Woods and Nasdaq build and maintain. The index picks US-listed financial companies with competitive dividend yields. It weights them by a modified dividend yield, so higher-yielding stocks generally get bigger weights, with some adjustments. As of October 31, 2025, the index held 40 stocks, ranging in market value from $413.7 million to $36.4 billion. The fund uses full replication, which means it buys every stock in the index at roughly its index weight. It keeps at least 90% of its assets in those stocks.
The yield rule pulls the fund toward two kinds of companies. Business development companies (BDCs) lend money to privately held businesses. Mortgage REITs invest in mortgages and related loans. As of May 31, 2026, the largest holdings were FS KKR Capital (4.1%), Orchid Island Capital (4.1%), New Mountain Finance (4.0%), Invesco Mortgage Capital (3.7%) and Trinity Capital (3.6%). The top 10 made up 36.87% of the fund.
Two mechanical points stand out. First, the fund's management fee is 0.35%, but its total expense ratio is 5.39%. Most of the gap comes from the operating costs of the BDCs it owns, which fund cost disclosures must include. Second, the fund only sells a stock when the index drops it, even if the stock is lagging. Portfolio turnover was 60%.
What it really costs
- KBWD charges 5.39% a year, versus an average of 0.98% for the similar funds below (7th of 7, cheapest first).
- Of that, 0.35% is the management fee; the rest covers other fund expenses.
- Using the prospectus's standard example, $10,000 invested would cost about $538 in the first year and $5,286 over 10 years (assuming a 5% annual return).
| Cost of $10,000 (SEC example) | 1 yr | 3 yrs | 5 yrs | 10 yrs |
|---|---|---|---|---|
| KBWD | $538 | $1,608 | $2,669 | $5,286 |
In a retirement portfolio
It pays a lot of income, but it is concentrated in BDCs and mortgage REITs, has a high total cost, and has fallen deeply in past selloffs.
KBWD can add a large monthly income stream. Its trailing 12-month yield was 16.13% as of October 27, 2026. That income comes from a narrow corner of the market, though, and the fund has fallen hard in downturns. It launched in December 2010, so it has no record for the 2008 crisis. In the 2020 COVID crash it fell 56.1% and took about 13 months to recover. In the 2022 bear market it fell 29.9% and took about 21 months to recover. Its worst calendar year was 2022, at −18.99%.
Anyone forced to sell in a year like that would lock in steep losses. The high payouts also haven't produced high total returns. Over 10 years, the fund returned an average of 4.23% a year as of December 31, 2024, and its expense ratio is 5.39%. Past results don't predict the future, and a plan should look at the whole portfolio, not one fund.
Who it may suit — and who should look elsewhere
May suit
- Income-focused investors who want monthly payouts from BDCs and mortgage REITs. The trailing yield was 16.13% as of October 27, 2026.
- Investors who want a rules-based basket of about 40 high-yield US financial stocks instead of picking individual BDCs or mortgage REITs.
- Holders who can sit through deep drops, such as the 56.1% fall in 2020, without having to sell shares.
Look elsewhere if
- Cost-conscious investors. The 5.39% expense ratio ranks 7th of 7 among similar funds, which average 0.98%.
- Anyone seeking broad diversification. The fund is concentrated in financials, mostly small and mid-sized lenders and mortgage REITs.
- Retirees who may need to sell during downturns. The fund took about 21 months to recover from its 2022 drop.
Close alternatives
Matched by closest holdings overlap from the latest N-PORT reports (no similar fund shares 20% or more of its holdings).
| Fund | Overlap | Cost | Net assets | 1 yr | 3 yr |
|---|---|---|---|---|---|
| KBWD this fund | — | 5.39% | $426.6M | -11.4% | +5.7% |
| DVDN Kingsbarn Dividend Opportunity ETF | 31% | 0.9% | $3.1M | -27.9% | — |
| REM iShares Mortgage Real Estate ETF | 30% | 0.48% | $547.9M | -14.1% | +6.5% |
| SRET Global X SuperDividend REIT ETF | 18% | 0.58% | $233.0M | -1.0% | +12.2% |
| XSHD Invesco S&P SmallCap High Dividend Low Vola… | 10% | 0.3% | $70.8M | +3.1% | +4.6% |
| PEX ProShares Global Listed Private Equity ETF | 8% | 2.99% | $11.7M | -10.1% | +7.9% |
| FXO First Trust Financials AlphaDEX Fund | 6% | 0.61% | $1.13B | +12.6% | +24.3% |
Questions investors ask
Does KBWD pay monthly dividends?
Yes. KBWD pays distributions monthly. Over the 12 months to October 27, 2026, it paid $1.71 per share, a trailing yield of 16.13%. The payouts depend on dividends from the BDCs and mortgage REITs it holds. Those companies can cut their dividends if their earnings or capital weaken, and the prospectus lists this as a risk. So the monthly amount isn't fixed and can fall.
Why is KBWD's expense ratio so high?
KBWD's total expense ratio is 5.39%, even though Invesco's management fee is only 0.35%. Most of the gap reflects the operating costs of the business development companies the fund owns. Funds that hold BDCs must include those costs in their stated expenses. In the SEC's standard example, a $10,000 investment earning 5% a year would cost about $538 over 1 year and $5,286 over 10 years.
Is KBWD good for retirement income?
It can produce high monthly income, but it comes with big risks. The trailing yield was 16.13% as of October 27, 2026. The fund fell 56.1% in the 2020 crash and 29.9% in 2022, and it took about 21 months to recover from the 2022 drop. Its 10-year average annual return was 4.23% as of December 31, 2024. It may suit a small slice of an income portfolio rather than the core.
What's the difference between KBWD and REM?
They overlap but aren't the same. REM, the iShares Mortgage Real Estate ETF, shares about 30% of KBWD's holdings and focuses on mortgage REITs. KBWD also holds many business development companies. REM costs far less, with a 0.48% expense ratio against KBWD's 5.39%. As of October 27, 2026, REM returned −14.1% over 1 year and 6.5% a year over 3 years. KBWD returned −11.4% and 5.7% over the same periods.
What are KBWD's top holdings?
As of May 31, 2026, KBWD's largest holdings were FS KKR Capital (4.1%), Orchid Island Capital (4.1%), New Mountain Finance (4.0%), Invesco Mortgage Capital (3.7%), Trinity Capital (3.6%) and Two Harbors Investment (3.6%). The top 10 made up 36.87% of the fund, spread across 40 companies. Most are business development companies or mortgage REITs, so weights are fairly even but the fund is concentrated in one kind of business.