# One Financial ETF Yields 15.70% and Lost Money

> High-yield financial ETF lost money while two peers kept pace with S&P 500.
- Title: One Financial ETF Yields 15.70% and Lost Money · 24/7 Wall St.
- Summary: High-yield financial ETF lost money while two peers kept pace with S&P 500. The Invesco KBW High Dividend Yield Financial ETF (KBWD) returned -8% over the…
- Keywords: invesco kbwd, vanguard financials etf, state street financial select sector spd, s&p 500, distribution yield, financial etf, leverage, reit, bdc, 24/7 Wall St.
- Source: 24/7 Wall St. — https://247wallst.com/investing/etf/2026/11/05/one-financial-etf-yields-15-70-and-lost-money-the-two-yielding-under-2-kept-pace-with-the-sp-500
- Author: Ryne Mauck
- Published: 2026-11-05T22:03:18+00:00
- Read time: 2 min
- Topics: invesco kbwd, vanguard financials etf, state street financial select sector spd, s&p 500, distribution yield, financial etf, leverage, reit, bdc
## High-Yield ETF Returns Negative
The Invesco KBW High Dividend Yield Financial ETF (KBWD) returned -8% over the year ended November 4, 2026, despite a 15.7% trailing twelve-month distribution yield.
## Two Simpler Funds Matched S&P 500
Both the Vanguard Financials ETF (VFH) and State Street Financial Select Sector SPDR ETF (XLF) returned approximately 15% over the same period, matching the iShares Core S&P 500 ETF (IVV) at 14%.
## KBWD's High Yield From Leveraged Lenders
KBWD holds 39 positions with $413 million in net assets, including mortgage REITs and business development companies (BDCs) like FS KKR Capital and Invesco Private Prime Fund.
## Why These Businesses Pay So Much
Mortgage REITs and BDCs must pay out at least 90% of taxable income to maintain tax status, driving high distributions and leveraged business models.
## Rates Explain Only Part of the Loss
Fed policy cuts and Treasury yield moves caused KBWD's monthly distribution to fall from $0.14795 in February 2026 to $0.13485 in October 2026.
## XLF Leans on Berkshire and JPMorgan
XLF holds Berkshire Hathaway at 12% and JPMorgan Chase at 12%, with Visa at 8% and Mastercard at 5% in its portfolio.
## VFH Reaches Deeper Financials
VFH covers midsize and smaller financials with a 0.09% expense ratio and 1.6% yield, while XLF focuses on large-cap financials.
## Five-Year Performance Comparison
KBWD returned -8% over five years, while XLF and VFH returned 61% and 59% respectively, both trailing the S&P 500's 76% return.
## What to Check Before Trusting Yield
Check total return, distribution trend, tax character, and underlying holdings to avoid high-yield traps.
## Which Fund Fits Which Investor
XLF suits large-cap financial investors; VFH suits broader midsize/small financials; KBWD only suits monthly cash flow seekers.
## Key takeaway

The Invesco KBW High Dividend Yield Financial ETF (KBWD) returned -8% over the year despite a 15.7% distribution yield, while Vanguard Financials ETF (VFH) and State Street Financial Select Sector SPDR ETF (XLF) both returned ~15%.