Forget About COLA Increases, These High Yield ETFs Will Do More For You

If 2025 has taught investors anything about investing, it’s that the markets have a mind of their own. Even when the bulls appear to dominate, the bears have had the fortitude to wrestle back control, leaving the markets in flux and investors scrambling to keep up. While perks like 2026 COLA increases can help, high yield ETFs could take you further ahead.

For 2026, the Social Security Administration is penciling in just a 2.8% COLA, based on the change in the CPI-W between the third quarter of 2024 and the third quarter of 2025. Meanwhile, inflation continues to rise at a faster clip of around 3%. Retirees are looking at a modest bump that may barely keep pace with price increases on the most basic of items, which is precisely why many income-focused investors are turning to high-yield ETFs to do the heavy lifting instead.

In that case, we have spotted a pair of high-yield ETFs that are poised do more for you than COLA increases in 2026. These include the State Street Blackstone High Income ETF (HYBL), paying monthly, and the State Street SPDR Portfolio S&P 500 High Dividend ETF (SPYD), making quarterly distributions.

• Social Security’s 2.8% COLA for 2026 trails inflation running near 3%.

• HYBL offers a 7.2% yield with monthly distributions and has raised its annual payout for two consecutive years.

• SPYD tracks the 80 highest dividend-yielding S&P 500 stocks and charges just 0.07% in fees.

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With roughly $545 million in assets under management, the State Street Blackstone High Income ETF (HYBL) tops our list. With a dividend yield of 7.2%, HYBL far outpaces Uncle Sam’s modest 2.8% COLA increase. The HYBL ETF, managed by State Street and Blackstone, strategy is to generate strong total returns with high income while keeping volatility lower than the broader bond and credit markets over time. To do so, it spreads investments across high-yield corporate bonds, senior loans, equity and U.S. CLO debt tranches using criteria such as macroeconomic trends, market conditions, fundamentals and its own credit analysis.

Top holdings include State Street Blackstone Senior Loan ETF, Fair Isaac Corp 4%, JetBlue Airways Corp / JetBlue Loyalty LP 9.875% and Cloud Software Group/Balboa/Citrix, among others. With wide sector allocation, this ETF reflects economic diversification with an emphasis on below investment grade credit quality assets. In 2025, HYBL’s NAV is up 7.1%.

With an expense ratio of 0.70%, dividends are paid monthly for a steady stream of income, with the most recent monthly distribution at $0.1662 per share. This ETF has paid about $2.06 per share over the past 12 months and has raised its annual distribution for the past two straight years.

With about $7.4 billion in assets under management, the State Street SPDR Portfolio S&P 500 High Dividend ETF (SPYD) is built for investors who want dividend income generated from inside the broader market index. The ETF seeks to track the total return of the S&P 500 High Dividend Index, which targets the top 80 high dividend-yielding companies in the S&P 500. The kicker is this fund’s low cost, with a modest 0.07% gross expense ratio. With a yield of 4.43% as of year-end 2025, SPYD pays distributions quarterly, making it a steady income payer even as consumer prices rise. So far in 2025, SPYD has distributed $1.4077 per share in dividend payments to investors.

Under the hood, SPYD holds dozens of stocks, with top positions including CVS Health, Invesco, Ford, Merck, AbbVie, Citizens Financial Group and Edison International. Sector exposure tilts heavily toward Real Estate (21.51%), Financials (17.03%), Consumer Staples (16.35%), and Utilities (13.38%), which can make the fund feel defensive while also sensitive to rate shifts compared with a broad market-cap-weighted S&P 500 fund. SPYD’s year-to-date NAV return hovered at close to 5% as of Q4 2025. It’s a savvy way to harness the stock market’s highest yielding dividend stocks in a single fund.

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