7 Monthly Dividend ETFs for your Investment Portfolio
By: Jonathan Wolfgram,
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 3%.
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.
Monthly dividend 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 monthly dividend ETFs of its kind. Most importantly, each ETF pays out at a dividend yield of 3% or higher.
7 Monthly Dividend ETFs for your Investment Portfolio: #7
VictoryShares International High Dividend Volatility Weighted ETF (NASDAQ: CID)
Current Dividend Yield: 6.1%
Stock Type: International Stock
Cap Size: Large Cap
Expense Ratio: 0.45%
Assets Under Management: $16 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 splits its $16 million in assets between several international categories. Its top 5 areas of investment are the Eurozone (30.5%), Canada (15.2%), Asia Developed (13.3%), Japan (12.5%) and the United Kingdom (12.5%).
CID is currently trading at $29.43 (as of December 6, 2022). 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 31.6% 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: 3.2%
Stock Type: US Stock
Cap Size: Large Cap
Expense Ratio: 0.38%
Assets Under Management: $1.1 Billion
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 primarily divides its assets between 5 industries: Healthcare (21.0%), Energy (18.6%), Consumer Defensive (17.3%), Financial Services (13.3%) and Utilities (12.4%).
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 December 6, 2022, the ETF is trading at $87.87.
This ETF has seen six consecutive years of dividend growth, with a five year growth rate of 6.25%.
7 Monthly Dividend ETFs for your Investment Portfolio: #5
Invesco High Yield Equity Dividend Achievers (NASDAQ: PEY)
Current Dividend Yield: 4.0%
Stock Type: US Stock
Cap Size: Multi Cap
Expense Ratio: 0.53%
Assets Under Management: $1.2 Billion
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 $1.2 Billion. The top three sectors held within PEY are financials, consumer staples, and utilities.
In terms of dividends, PEY has seen a 5-year dividend growth rate of 7.96%, demonstrating strong financial performance of its investments.
PEY is currently trading at $21.13, 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.
7 Monthly Dividend ETFs for your Investment Portfolio: #4
Invesco S&P 500 High Dividend Low Volatility ETF (NYSE: SPHD)
Current Dividend Yield: 3.8%
Stock Type: US Stock
Cap Size: Multi Cap
Expense Ratio: 0.30%
Assets Under Management: $3.8 Billion
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.
SPHD is currently trading at $44.86 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 5-year dividend growth rate of 7.6%.
7 Monthly Dividend ETFs for your Investment Portfolio: #3
Global X SuperDividend Emerging Markets (NYSE: SDEM)
Current Dividend Yield: 10.1%
Stock Type: Emerging Markets
Cap Size: Multi Cap
Expense Ratio: 0.67%
Assets Under Management: $63 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. SDEM is currently trading at $8.01.
7 Monthly Dividend ETFs for your Investment Portfolio: #2
Global X SuperDividend ETF (NYSE: SDIV)
Current Dividend Yield: 14.31%
Stock Type: International Stock
Cap Size: Multi Cap
Expense Ratio: 0.58%
Assets Under Management: $729 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, Latin America and Emerging Asia. The top sectors of investment are real estate, basic materials and financials.
SDIV is currently trading at $8.26, 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: 6.9%
Stock Type: US Stock
Cap Size: Small Cap
Expense Ratio: 0.35%
Assets Under Management: $280 Million
KBWY tracks an index of small and mid-cap equity REITS in the US and weights the stocks based on dividend yield.
KBWY’s top three sectors are commercial REITs, specialized REITs and residential REITs. The ETF is currently trading at $20.67, 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 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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