7 Monthly Dividend ETFs for your Investment Portfolio
By: Olivia Faucher,
While exchange-traded funds (ETFs) offer individual investors easy diversification, steady returns and low fees, monthly dividend ETFs offer the additional benefit of a reliable monthly cash flow for income-seeking investors. This article recommends 7 monthly dividend ETFs that all pay a dividend of at least 4%.
Some investors may have historically chosen to invest in mutual funds, ETFs in recent years have become a very popular investment alternative because of a number of compelling advantages that they offer.
ETFs can be sold and bought continuously throughout the trading session just like stocks, unlike mutual funds, which can be traded only after the close of trading each day. Additionally, ETFs offer investors much greater transparency. Even if fund managers trade underlying securities, mutual funds still report their holdings only once every quarter, which means that investors work with information that is more than two months old when selecting their investments. However, ETF information is always current, as such funds report their holdings on a daily basis.
Furthermore, mutual fund management fees can be significantly higher than the fees that ETFs charge. While fees are only small fractions of the fund’s value, even a small percentage difference in fees can result in significantly higher total returns when compounded over long periods.
The following 7 monthly dividend ETFs offer a diversified selection of dividend investing choices, including US stock ETFs, international stock ETFs and an emerging market ETF. Additionally, the list includes a mix of large-cap and small-cap ETFs, and some smart ETFs. In addition to offering diversification, other considerations for the list included financial metrics such as expense ratio, assets under management, etc. Each of the following monthly dividend ETFs stands out, financially, against other ETFs of its kind. Most importantly, each ETF pays out at a dividend yield of 4% or higher. The list is sorted in ascending order by current dividend yield.
7 Monthly Dividend ETFs for your Investment Portfolio: #7
VictoryShares International High Dividend Volatility Weighted ETF (NASDAQ: CID)
Current Dividend Yield: 3.75%
Stock Type: International Stock
Cap Size: Large Cap
Expense Ratio: 0.45%
Assets Under Management: $65 Million
This ETF operates in the international equity space, specifically investing in large cap stocks that reside in developed markets. The stocks within CID are screened for positive earnings and high dividend yield, and weighted inversely by volatility. This ETF provides investors with a combination of high dividends and low volatility in the realm of international equity.
The ETF comprises 101 holdings, totalling $65 million in assets. 15.47% of total assets are within the ETF’s top ten holdings. The top three sectors that the ETF holds stock in are financials, telecommunications and basic materials. The United Kingdom, Japan, and Australia are the top three countries that CID holds investments in.
The top 10 holdings are:
– Softbank Corp
– BCE Inc
– Deutsche Telekom AG
– TELUS Corp
– KT&G Corp
– DBS Group Holdings Ltd
– Japan Tobacco Inc
– Shaw Communications Inc Class A
– Koninklijke Ahold Delhaize NV
– Admiral Group PLC
CID is currently trading at $26.65 (as of July 22, 2020). The stock price took a large hit due to the global pandemic, falling from $32.67 to $20.28 over the course of one month from February to March 2020. Since then, the price has been on a steady uptrend.
This ETF has seen a dividend growth rate of 9.02% over the last 3 years, signaling to investors that it is a worthwhile and sustainable investment.
7 Monthly Dividend ETFs for your Investment Portfolio: #6
WisdomTree US High Dividend Fund (NYSE: DHS)
Current Dividend Yield: 3.95%
Stock Type: US Stock
Cap Size: Large Cap
Expense Ratio: 0.38%
Assets Under Management: $720 Million
Since this ETF is linked to the WisdomTree Equity Income Index, it offers exposure to large cap companies which pay dividends, exhibit value characteristics, and operate within the US equity market. This ETF tracks a dividend-weighted index of US companies that pay high dividends. DHS invests in well-known and stable companies such as Pfizer, Verizon, IBM, etc. The fund weights securities based on total dividends paid, which potentially gives investors a unique exposure to the market.
The ETF has 299 holdings, most of which fall into the financials, healthcare and technology sectors. 41.14% of the ETF’s $720 million in assets reside in the top ten holdings.
The top 10 holdings are:
– AbbVie Inc
– Verizon Communications Inc
– Pfizer Inc
– AT&T Inc
– IBM
– Chevron Corporation
– Cisco Systems Inc
– Philip Morris International Inc
– Bristol-Myers Squibb Company
– Coca-Cola Co
The price of this ETF has been on an upward trend over the past 5 years. In March 2020, the price hit a low point of $48.28 due to the financial crisis, but it has been trending up ever since then. As of July 22, 2020, the ETf is trading at $63.84.
This ETF has seen six consecutive years of dividend growth, with a five year growth rate of 9.6%.
7 Monthly Dividend ETFs for your Investment Portfolio: #5
Invesco High Yield Equity Dividend Achievers (NASDAQ: PEY)
Current Dividend Yield: 5.09%
Stock Type: US Stock
Cap Size: Multi Cap
Expense Ratio: 0.53%
Assets Under Management: $625.7 Million
* Smart ETF
This ETF focuses on the stocks of US companies that have consistently increased dividends over time. The stocks are selected based on dividend yield and consistent dividend growth, resulting in a portfolio that should have a beta less than 1.0 and offer a much higher distribution yield than broad-based market ETFs. PEY may be an attractive option for investors who want exposure to equities while simultaneously scaling back risk.
The ETF is made up of 51 holdings, totaling $625.7 million in assets. The top ten holdings account for 29.63% of these assets, making it a relatively low risk ETF. The top three sectors held within PEY are financials, consumer staples, and utilities.
The top 10 holdings are:
– Helmerich & Payne Inc
– Avista Corp
– ONEOK Inc
– Altria Group Inc
– Exxon Mobil Corp
– Unum Group
– Ryder System Inc
– Comerica Inc
– Northwest Bancshares Inc
– Lazard LTD Shs Aaa
In terms of dividends, PEY has seen a three year dividend growth rate of 10.75%, demonstrating the strong financial performance of its investments.
PEY is currently trading at $14.71, a price that it has been on an upward trend to achieve after the ETF fell to $11.14 in March due to the financial crisis. Over the 10 years from 2009 to 2019, PEY delivered positive total annual returns for nine of those years, with an average positive return of 19.37%.
7 Monthly Dividend ETFs for your Investment Portfolio: #4
Invesco S&P 500 High Dividend Low Volatility ETF (NYSE: SPHD)
Current Dividend Yield: 5.47%
Stock Type: US Stock
Cap Size: Multi Cap
Expense Ratio: 0.30%
Assets Under Management: $2.435 Billion
* Smart ETF
SPHD is an ETF that invests in the 50 least volatile, highest yielding stocks within the S&P 500. SPHD is a dividend-weighted ETF which is focused on stocks that deliver the highest dividends along with the least volatility.
The 50 holdings within this ETF total $2.35 billion in assets. 28.73% of those assets are attributed to the top ten holdings. The ETF’s relatively low expense ratio, coupled with its high AUM, make it an attractive buy for investors. Investors know they are getting a lot in return for their money, and that they are making a sound investment.
The top 10 holdings are:
– Williams Companies
– Iron Mountain Inc
– Altria Group Inc
– Gilead Sciences Inc
– Philip Morris International Inc
– Dominion Energy Inc
– General Mills Inc
– IBM
– AT&T Inc
– Progressive Corp
SPHD is currently trading at $33.81 while it is on an upwards trend, rebounding from the large negative impacts of the global pandemic.
The ETF has experienced seven years of consecutive dividend growth, reporting a 10-year dividend growth rate of 10.97%.
7 Monthly Dividend ETFs for your Investment Portfolio: #3
Global X SuperDividend Emerging Markets (NYSE: SDEM)
Current Dividend Yield: 6.4%
Stock Type: Emerging Markets
Cap Size: Multi Cap
Expense Ratio: 0.67%
Assets Under Management: 21.6 Million
This ETF invests in stocks from emerging market countries. Launched in March 2015, SDEM selects stocks with the highest dividend yield and weights the stocks equally. The ETF has 50 holdings, which are selected as the highest-yielding 50 emerging markets stocks after screening for consistent dividends over the year. SDEM is currently trading at $10.78.
24.52% of the ETF’s $21.6 million in assets are in the top ten holdings, and indication that the risk is well dispersed. SDEM’s top three investment sectors are financials, real estate, and basic materials. The top three markets that the ETF’s investments reside in are Hong Kong, Russia and Brazil.
The top 10 holdings are:
– Cielo SA
– Banco do Brasil SA BB Brasil
– Banco Santander (Brasil) SA Unit
– REC Ltd
– BB Seguridade Participacoes SA
– Exxaro Resources Ltd
– Grupo Financiero Banorte SAB de CV Class O
– Magnit PJSC GDR
– BR Malls Participacoes SA
– Absa Group Ltd
7 Monthly Dividend ETFs for your Investment Portfolio: #2
Global X SuperDividend ETF (NYSE: SDIV)
Current Dividend Yield: 8.39%
Stock Type: International Stock
Cap Size: Multi Cap
Expense Ratio: 0.58%
Assets Under Management: $640.4 Million
This ETF tracks an equal-weighted index of 100 global stocks with high yields. SDIV is among the biggest funds in the dividend-seeking global equity segment.
The ETF’s 100 holdings feature the most stocks from the US, United Kingdom, and Australia. The top sectors of investment are real estate, basic materials and financials. 17% of its $640.4 million in net assets is within the top ten holdings, making it a relatively low risk ETF.
The top 10 holdings are:
– B&G Foods Inc
– Diversified Gas & Oil PLC
– Kumba Iron Ore Ltd
– Jasmine International PCL DR
– Novolipetsk Steel PJSC GDR
– Alpek SA Class A
– Sasseur REIT
– Mobile TeleSystems PJSC ADR
– Eregli Demir Ve Celik Fabrikalari TAS
– Severstal PAO GDR
Since its inception in 2011, the ETF has delivered positive returns in six out of eight years. SDIV is currently trading at $11.44, a price that has been on the rebound since March 2020 when it fell to just $8.10 at the peak of the financial crisis.
7 Monthly Dividend ETFs for your Investment Portfolio: #1
Invesco KBW Premium Yield Equity REIT ETF (NASDAQ: KBWY)
Current Dividend Yield: 13.64%
Stock Type: US Stock
Cap Size: Small Cap
Expense Ratio: 0.35%
Assets Under Management: $163.2 Million
KBWY tracks an index of small and mid-cap equity REITS in the US and weights the stocks based on dividend yield. The ETF’s 31 holdings offer exposure to the real estate industry within the US equity market.
KBWY’s top three sectors are commercial REITs, specialized REITs and residential REITs. 19.36% of the ETFs total assets ($163.2 million) are within its top ten holdings. The ETF is currently trading at $18.32, which is much lower than the $32 range that it was trading at in February before the financial crisis. It could be a favorable time to buy, while the price is relatively depressed.
The top 10 holdings are:
– Macerich Co
– The GEO Group Inc
– American Finance Trust Inc
– Bluerock Residential Growth REIT Inc Class A
– Brookfield Property REIT Inc
– Global Net Lease Inc
– CoreCivic Inc
– New Senior Investment Group Inc
– Preferred Apartment Communities Inc
– SL Green Realty Corp
KBWY has a strong track record for its investors, providing positive returns in the last six out of nine years. Additionally, the ETF boasts a 7.44% dividend growth rate over the past 5 years, offering investors solid growth along with the reliable monthly dividend.
The list of the top 7 Monthly Dividend ETFs to consider for your portfolio above ranks the funds primarily by their current dividend yield. However, as with all investment decisions, individual investors should conduct their own analysis to validate that the funds’ other metrics, such as share-price trend, payout ratios, long-term and short-term total returns, etc., support their specific portfolio strategy. To see more stock ETFs with strong monthly dividends, visit our article The Complete List of Monthly Dividend ETFs paying 3%-Plus Distributions.
Other Related Articles
Complete List of Stocks That Pay Monthly Dividends
Complete List of Monthly Dividend Stocks Paying 4%-Plus
6 Monthly Dividend Stocks to Buy Now
The Complete List of Monthly Dividend ETFs paying 3%-Plus Distributions.
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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.
