Driven in part by AI helping me optimize my investment portfolio, I am updating the ETFs in my taxable brokerage account for 2026. As a high income earner, taxation is a significant issue and driver for me in how I invest my money. Below is a table I created with AI to explain some of the reasoning behind what’s now in my taxable brokerage account.
| ETF | Primary Role | Why It Helps a High-Income Portfolio |
|---|---|---|
| DGRO | Dividend growth | Long-term income growth & quality equity exposure |
| IDV | International dividends | Adds global dividend & currency diversification, foreign income tax credit |
| VYMI | Broad international yield | Enhances overall yield with emerging markets, foreign income tax credit |
| SCHY | International quality dividend | Adds stable developed market income, foreign income tax credit |
| QDVO | Growth + income with options | Supplemental enhanced income strategy |
| MUB | Tax-free muni income | Core tax-efficient fixed income |
| VTEB | Tax-free muni income at low cost | Improves tax-adjusted yield with low fees |
| NEA | Active muni income | Higher monthly tax-exempt income (more complex) |
In addition the the tax optimizing ETFs above I also carry some ETHA and IBIT in net credit collar configuration to squeeze some premium income out of digital currencies. I also own a basket of municipal individual bonds in the portfolio.
The ETF funds should be relatively stable in 2026 so I’ve programmed my brokerage to systematically add more funds to some of these each month for 2026.
I also hold a large cash position for reserves in case the market corrects severely and presents a long term buying opportunity.
My plan isn’t to hold most of the municipal bonds indefinitely, the income from these funds will count against IRMAA once I sign up for medicare a decade or so from now even though the income doesn’t count on my federal income tax return. I do have a tentative plan for IRMAA on this post.
I own these funds because I now have income from a full time job, income from rental properties, income from dividend stocks, income from options trading, income from interest on cash holdings, and income on munis (now tax free).
Here’s the AI explanation as well.
📈 Core Equity Income — Dividend Growth & Diversification
DGRO — iShares Core Dividend Growth ETF
Role: Dividend growth strategy
Why it makes sense:
- Targets U.S. companies with a history of raising dividends — helps income keep pace with inflation over time.
- Good for long-term hold and income growth rather than just yield.
- Lower emphasis on highest yield means steadier quality companies with financial strength.
SCHY — Schwab International Dividend Equity ETF
Role: International dividend income
Why it makes sense:
- Offers non-U.S. dividend payers with consistent payouts — broadens geographic diversification.
- Screens for companies with quality dividend histories outside the U.S., which diversifies value drivers and risk.
- Complements a U.S. dividend income core by adding global yield exposure.
IDV — iShares International Select Dividend ETF
Role: High-yield international dividend exposure
Why it makes sense:
- Focuses on developed markets outside the U.S. with relatively high dividend yields.
- Adds yield and geographic diversification that is different from U.S.-centric dividend funds.
- Good for income-oriented investors who want foreign dividend exposure.
VYMI — Vanguard International High Dividend Yield ETF
Role: Broad international dividend yield
Why it makes sense:
- Tracks high-yielding stocks across developed and emerging markets, excluding the U.S.
- Adds emerging market dividend exposure (more yield opportunity) in addition to developed markets.
- Useful to boost overall portfolio yield with non-U.S. income sources.
💼 Income Enhancement — Covered Call / Growth & Income
These are more specialized strategies that blend equity exposure with enhanced income production.
QDVO — Amplify CWP Growth & Income ETF
Role: Active growth + income with options overlay
Why it makes sense:
- Seeks capital appreciation plus high current income via dividends and tactical covered call writing.
- That covered call strategy generates extra income in sideways markets while still offering equity upside.
- A good complement to traditional dividend ETFs for higher current income, albeit with more complexity.
💰 Fixed Income — Tax-Efficient Income for High Earners
Municipal-bond ETFs are especially appealing to high income investors because their interest is typically federal tax-exempt.
MUB — iShares National Muni Bond ETF
Role: Broad tax-exempt municipal bonds
Why it makes sense:
- Provides federally tax-free income from investment-grade municipal bonds — very beneficial in high tax brackets.
- Broad diversification across thousands of muni bonds reduces single-issuer risk.
- Works well in taxable accounts where tax efficiency matters most.
VTEB — Vanguard Tax-Exempt Bond ETF
Role: Ultra-low cost national muni exposure
Why it makes sense:
- Also offers federal tax-exempt income with very low expenses, which boosts after-tax yield.
- Often favored by advisors for higher tax-equivalent yield among muni bond ETFs.
- Great “core” fixed income piece for conservative income with tax-efficiency.
NEA — Nuveen AMT-Free Quality Municipal Income Fund
Role: Active muni income exposure (closed-end fund structure)
Why it makes sense:
- Provides monthly tax-exempt income that can be especially attractive for retirees or high earners needing cash flow.
- Actively managed portfolio of municipal bonds may seek extra yield above passive muni ETFs.
- Note: Closed-end funds can trade at premiums/discounts and have leverage risks, so they’re more nuanced as part of a strategy.
Share The Wealth
What’s in your taxable brokerage account and how are you optimizing tax strategy? Let me know in the comments below.