Looking for ETFs with the highest monthly dividends? This guide reveals the top 10 high-yield dividend ETFs, compares their payouts, and explains the risks vs. rewards of monthly income investing.
Introduction: Why Monthly Dividend ETFs Are So Popular
Investors love monthly dividend ETFs because they:
- Provide consistent cash flow (perfect for retirees)
- Compound faster than quarterly-paying funds
- Reduce volatility with steady income
But not all high-yield ETFs are safe. Some sacrifice sustainability for big payouts.
In this data-driven guide, we’ll cover:
- Top 10 highest-paying monthly dividend ETFs (2024 updated list)
- Dividend yields compared (6% to 20%+)
- Risks of ultra-high-yield ETFs (return of capital, dividend cuts)
- Best ETFs for safety + growth (not just high yield)
- Tax implications of monthly dividends
By the end, you’ll know exactly which ETFs pay the most—and which are worth the risk.
Chapter 1: The 10 Highest Monthly Dividend ETFs (2024 Rankings)
Here are the highest-yielding monthly dividend ETFs, ranked by dividend yield (as of 2024):
| ETF | Ticker | Dividend Yield | Payout Frequency | Expense Ratio |
|---|---|---|---|---|
| JPMorgan Equity Premium Income ETF | JEPI | 7-9% | Monthly | 0.35% |
| Global X SuperDividend ETF | SDIV | 12-14% | Monthly | 0.58% |
| Invesco KBW High Dividend Yield Financial ETF | KBWD | 10-12% | Monthly | 1.24% |
| ALPS Sector Dividend Dogs ETF | SDOG | 5-6% | Monthly | 0.40% |
| SPDR Portfolio S&P 500 High Dividend ETF | SPYD | 4-5% | Monthly | 0.07% |
| iShares Preferred & Income Securities ETF | PFF | 6-7% | Monthly | 0.46% |
| VanEck BDC Income ETF | BIZD | 10-11% | Monthly | 9.99% |
| Global X NASDAQ 100 Covered Call ETF | QYLD | 11-12% | Monthly | 0.60% |
| Reality Income Corp (Not an ETF but pays monthly) | O | 5-6% | Monthly | N/A |
| Franklin U.S. Low Volatility High Dividend ETF | LVHD | 3-4% | Monthly | 0.27% |
Key Takeaways:
- JEPI & QYLD are the most popular covered-call ETFs (high yield, moderate risk).
- SDIV & KBWD offer 12%+ yields but are very risky (some dividends may not be sustainable).
- SPYD & LVHD are safer but pay lower yields (3-6%).
Chapter 2: Risks of Chasing the Highest Dividend ETFs
1. Return of Capital (ROC) – The Hidden Trap
Some ETFs return your own money as dividends (not real profits). This erodes your principal over time.
Example:
- If an ETF pays a 12% yield but 5% is ROC, your investment shrinks.
2. Dividend Cuts (When High Yields Don’t Last)
ETFs like SDIV and KBWD have cut dividends before when markets crashed.
3. High Expense Ratios (Eats Into Returns)
- BIZD charges 9.99% (!) due to its complex structure.
- Stick to ETFs under 0.60% fees for better long-term returns.
Chapter 3: Best "Safe" Monthly Dividend ETFs (Lower Yield But Reliable)
If you want steady income without extreme risk, consider:
1. JPMorgan Equity Premium Income ETF (JEPI)
- Yield: 7-9%
- Strategy: Covered calls on S&P 500 stocks
- Why it’s safe? Backed by JPMorgan, no dividend cuts since launch.
2. SPDR S&P 500 High Dividend ETF (SPYD)
- Yield: 4-5%
- Strategy: Tracks 80 highest-yielding S&P 500 stocks
- Why it’s safe? Low expense ratio (0.07%), diversified holdings.
3. iShares Preferred Stock ETF (PFF)
- Yield: 6-7%
- Strategy: Invests in bank preferred stocks
- Why it’s safe? Preferred stocks are less volatile than common stocks.
Chapter 4: Tax Implications of Monthly Dividends
Qualified vs. Non-Qualified Dividends
| Dividend Type | Tax Rate | ETFs That Pay Them |
|---|---|---|
| Qualified | 0%, 15%, or 20% (Long-term) | SPYD, LVHD |
| Non-Qualified | Ordinary income tax (Up to 37%) | JEPI, QYLD, SDIV |
Key Insight:
- Covered-call ETFs (JEPI, QYLD) pay mostly non-qualified dividends (higher taxes).
- Traditional dividend ETFs (SPYD, SCHD) pay qualified dividends (lower taxes).
Chapter 5: How to Build a Monthly Dividend Portfolio
Sample $100K Portfolio for Monthly Income
| ETF | Allocation | Estimated Monthly Income |
|---|---|---|
| JEPI (7% yield) | $40,000 | $233 |
| SPYD (4.5% yield) | $30,000 | $112 |
| PFF (6% yield) | $20,000 | $100 |
| O (5.5% yield) | $10,000 | $46 |
| Total Monthly Income | $491 |
Strategy:
- Mix high-yield (JEPI) + safer picks (SPYD)
- Reinvest dividends to grow income over time
Final Verdict: What’s the Best Monthly Dividend ETF?
Best Overall: JEPI (7-9% yield, sustainable)
Highest Yield: SDIV (12-14% but risky)
Safest Pick: SPYD (4-5%, low fees)
Final Tip: Avoid chasing the highest yield—focus on sustainable payouts instead.
FAQ: Monthly Dividend ETFs
Q: Can you live off ETF dividends?
A: Yes, if you have $500K+ invested (e.g., $500K in JEPI = ~$35K/year).
Q: Do any ETFs pay 20% monthly dividends?
A: No. Any fund claiming this is likely a scam or returning capital.
Q: What’s better, monthly or quarterly dividends?
A: Monthly compounds faster, but the total annual yield matters more.
Hope this article is useful? Or you have one or two experiences or information to share with us? Kindly let us know in the comment section.
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