10 High Monthly Dividend ETFs Revealed
By: Ned Piplovic,
Exchange-traded funds (ETFs) offer an easy strategy for portfolio diversification, but high monthly dividend ETFs also generate steady income distributions desired by income-seeking investors.
Using the ETF Directory available at DividendInvestor.com, I selected the monthly dividend ETFs with the highest dividend yield alongside several other metrics. The following 10 high monthly dividend ETFs have histories of high dividend yields and should provide steady monthly income distributions to complement any investment portfolio’s capital growth strategy.
10 High Monthly Dividend ETFs: #10
VanEck Vectors Fallen Angel High Yield Bond ETF (NYSE:ANGL)
This fund attempts to replicate the price and yield performance of the ICE BofA ML U.S. Fallen Angel High Yield Index. This index is comprised of below-investment grade corporate bonds that are denominated in U.S. dollars, issued in the U.S. domestic market and were rated as investment grade at the time of issuance.
The fund’s 331 holdings combine for more than $2 billion in total assets. Among the holdings, nearly 90% are U.S. securities. Most of the remaining holdings comprise investments in Italy (6.7%), the United Kingdom (6.6%), Japan (5%) and Germany (4%). Equities from Australia, Canada, Sweden, China, Finland and Ireland contribute less than 3% each.
The current forward dividend yield of 4.7% contributed roughly a third of the fund’s total returns in the last 12 months at 17.1%. In the trailing three and five years, the fund returned 25.4% and 78% to investors, respectively.
10 High Monthly Dividend ETFs: #9
iShares 0-5 Year High Yield Corporate Bond ETF (NYSE:SHYG)
This bond ETF seeks to track the investment results of the Markit iBoxx USD Liquid High Yield 0-5 Index, which comprises of U.S. dollar-denominated, high yield corporate bonds with remaining maturities of less than five years. As of January 19, 2021, the fund had 746 individual holdings representing aggregate total assets of more than $2.4 billion.
The fund’s current dividend yield of 5% combined with capital gains to deliver a total return of nearly 8% over the trailing 12-month period. Capital appreciation over the last three and five years are approaching 14% and 37%, respectively.
10 High Monthly Dividend ETFs: #8
SPDR Portfolio High Yield Bond ETF (NYSE:SPHY)
The fund seeks to provide investment results that, before fees and expenses, correspond generally to the price and yield performance of the ICE BofAML US High Yield Index. The fund’s more than $182 million in assets comprise almost exclusively of corporate bonds from just two sectors – Financial Services (95.56%) and Energy (4.44%). The current monthly dividend distributions correspond to a 5.6% forward dividend yield. Including the fund’s share price growth, investors enjoyed a total return of nearly 12% over the trailing 12-month period and a total return of 42.4% over the past five years.
10 High Monthly Dividend ETFs: #7
iShares Preferred & Income Securities ETF (NASDAQ:PFF)
This ETF seeks to track the investment results of an index composed of U.S. dollar-denominated preferred and hybrid securities. As of mid-January, 2021, this ETF held more than $19.2 billion in assets under management spread across 515 individual holding from eight countries. The vast majority of holdings – 99% – were from U.S.-based equities. Assets from the United Kingdom and the Netherlands accounted for slightly less than 0.5% each.
The remaining assets were spread across equities from Canada, China, Spain, Marshall Islands and Bermuda. Bank holdings and other diversified financial securities account for nearly half of funds securities. The fund’s current dividend payouts yield 1.9% and its returns over the trailing 12 months have totaled roughly 8%.
10 High Monthly Dividend ETFs: #6
Invesco KBW Premium Yield Equity REIT ETF (NASDAQ:KBWY)
This fund follows the makeup and performance of the KBW Nasdaq Premium Yield Equity REIT Index. The Fund generally invests at least 90% of its total assets in the securities of small- and mid-cap equity REITs included in the underlying Index that have competitive dividend yields and are publicly-traded in the U.S. As of January 19, 2021, total net assets of more than $207 million across 32 individual holdings. Top ten holdings account for nearly half of the fund’s total assets.
For its most recent monthly payout mid-January, the fund paid a dividend of $0.13 per share, and in the last years its annualized payout totaled $2.15, equivalent to a 10.7% trailing 12 month yield and a 7.3% forward yield. In the last year, the fund lost 23.8% in capital, but is still up over 12% in the long run when looking at the trailing five years.
10 High Monthly Dividend ETFs: #5
First Trust Multi-Asset Diversified Income Index Fund (NASDAQ:MDIV)
The MDIV fund generally tracks the NASDAQ US Multi-Asset Diversified Income IndexSM. The ETF allocates its total net assets – more than $461 million as of January 19, 2021 – across 126 individual holdings. Currently, the fund’s assets represent five equity classifications – dividend-paying equities, real estate investment trusts (REITs), preferred securities, master limited partnerships (MLPs) and high-yield corporate debt ETFs – each with share of assets ranging from 18% to 22.7% . The fund currently offers a 5.08% yield that combined with asset appreciation for an 8% loss this year. In the trailing five years, the fund has faired much better, rewarding investors with nearly 24% in capital appreciation.
10 High Monthly Dividend ETFs: #4
VanEck Vectors Emerging Markets High Yield Bond ETF (NYSEArca:HYEM)
This ETF uses the ICE BofAML Diversified High Yield US Emerging Markets Corporate Plus Index (EMLH) as the target for its performance goals. The fund invests in U.S. dollar-denominated bonds issued by non-sovereign emerging markets issuers that are rated below investment grade. As of January 19, 2021, the fund allocated its total net assets of $447 million across 766 individual holdings. Investments in HYEM’s top four countries – China, Brazil, Turkey and Argentina – account for slightly more than 30% of the fund’s total assets. The fund’s dividend yield of 5.8% and the modest asset appreciation delivered a combined total return of nearly 9% over the trailing 12 months and more than 47% over the past five years.
10 High Monthly Dividend ETFs: #3
Global X SuperIncome Preferred ETF (NYSEArca:SPFF)
The SPFF invests in nearly 50 of the highest-yielding preferred stocks in North America, compared to the DIV’s focus on U.S. securities. SPFF tracks the S&P Enhanced Yield North American Preferred Stock Index and currently has nearly $200 million of net assets distributed across 48 securities. Equities in the Financials sector account for more than two-thirds of total assets. Including Real Estate and Energy, the top three sectors account for nearly 90% of assets. The fund currently offers a 5.7% yield and its share price has gained 6.5% in the trailing 12 months to bring investors total returns of 12.2%.
10 High Monthly Dividend ETFs: #2
JP Morgan Emerging Markets Local Currency Bond ETF (NYSE:EMLC)
With $3.56 billion in assets under management, the ETF seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the J.P. Morgan GBI-EM Global Core Index (GBIEMCOR). The index comprises bonds issued by emerging market governments and denominated in the local currency of the issuer. Top ten of the ETF’s 266 current holding account for 19.13% of the fund’s total assets.
The fund has a current yield of 4.7% combined with a recovering share price to deliver an 7.4% total return over the past year, which is higher than the 1.3% share price growth in the last three years.
10 High Monthly Dividend ETFs: #1
Invesco CEF Income Composite ETF (NYSEARca:PCEF)
This fund tracks the S-Network Composite Closed-End Fund IndexSM. The fund generally invests at least 90% of its total assets in securities of funds included in the Index. The Fund is a “fund-of-funds,” as it invests its assets in the common shares of funds included in the Index rather than in individual securities.
With a promising dividend yield of 7.4%, the fund has rewarded investors with total returns of 11.4% in the trailing 12 months. Long-term investors have seen greater payoff still, with a three-year return of 19% and a five-year return of 66.2%
Investors should conduct their own due diligence to confirm that the various funds’ other metrics, such as share-price trend, payout ratios, long-term and short-term total returns, etc., support their portfolio strategies and choose their investment equities accordingly.
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Ned Piplovic is the assistant editor of website content at Eagle Financial Publications. He graduated from Columbia University with a Bachelor’s degree in Economics and Philosophy. Prior to joining Eagle, Ned spent 15 years in corporate operations and financial management. Ned writes for www.DividendInvestor.com and www.StockInvestor.com.