Exchange-traded funds, or ETFs, are like a shopping cart. Each one can have many different items, and when you get a dividend, it’s like receiving a free sample of the goods in your cart. You can eat the sample, by taking the dividend as cash, or put it back into your cart, by reinvesting it. In either case, the more often you get dividends, the more you get to eat or reinvest. Not all ETFs pay a regular dividend, but many do, and many make distributions monthly.
There are several key benefits to monthly dividend income. One of the most important is that monthly dividends can serve as a hedge against rising consumer prices during times of heightened inflation. When inflation is running hot, prices are going up fast and the spending power of a dollar is falling at the same rate. If you’re feeling the squeeze, you may prefer to receive any money that’s coming to you — including dividends from ETFs — as soon as possible.
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Another benefit of monthly dividend ETFs is more frequent reinvestment opportunities. Today’s securities markets are dynamic and fast-moving; buying opportunities can develop in an instant. When your dividends are distributed to you monthly, you’ll have more capital on hand to take advantage of trends or breaking news.
“However, when it comes to dividend ETFs, there is no guarantee that dividends will be paid,” says Steve Azoury, a chartered financial consultant and owner of Azoury Financial. A company can cut its dividend at any time.
“Also, stock price declines may offset the yield,” Azoury says. Some funds may go after “risky securities to keep up the dividend, as many are drawn toward the yield.” As such, he prefers to buy moderate-growth mutual funds and then sell shares as needed to provide income.
The bottom line when it comes to monthly versus quarterly dividends is that it’s simply better to get paid every 30 days rather than every 90 days, as long as you invest in the right funds. That’s the idea behind this list, which includes bond funds, equity funds and a real estate investment trust (REIT) fund that mirrors the performance of a popular REIT index. In other words, with a little bit of research and some thought about your asset allocation, it’s likely you’ll find that one or more of these six funds are right for you:
| ETF | Expense ratio | Trailing-12-month yield |
| Defiance S&P 500 Target Income ETF (ticker: SPYT) | 0.87% | 20.9% |
| JPMorgan Equity Premium Income ETF (JEPI) | 0.35% | 8.2% |
| JPMorgan Nasdaq Equity Premium Income ETF (JEPQ) | 0.35% | 10.1% |
| Global X SuperDividend ETF (SDIV) | 0.58% | 9.6% |
| iShares Preferred and Income Securities ETF (PFF) | 0.45% | 6.6% |
| Vanguard Total Bond Market Index Fund (BND) | 0.03% | 3.8% |
Defiance S&P 500 Target Income ETF (SPYT)
With a trailing-12-month dividend yield of nearly 21%, it’s hard not to look twice — or three times — at SPYT.
The actively managed fund uses options strategies to generate a target annual income of 20%. It holds shares of S&P 500 ETFs, then sells S&P 500 index call spreads to maintain growth potential. This gives the fund the potential to increase in value with the S&P 500, something that appeals to Steven Conners, founder and president of Conners Wealth Management in Scottsdale, Arizona, who likes the fund for dividend investors.
“This ETF should do okay in all market environments due to the higher yield and its strategy. However, there are no guarantees,” he says.
It’s up over 12% year to date, but this is mitigated somewhat by a relatively high expense ratio of 0.87%. “They do have to sell covered calls every month, which can be expensive for them, and I believe is worth the fee for investors,” Conners says.
More than 100,000 shares trade hands each day, on average, keeping the fund fairly liquid.
JPMorgan Equity Premium Income ETF (JEPI)
JEPI is another top monthly dividend ETF, according to Conners, who expects it to continue to be a strong performer.
“A general rule of thumb to follow is the lower the yield on a dividend-paying ETF, the higher expected growth over extended periods of time,” he says. “Conversely, the higher the dividend yield on an ETF in this category, the lower expected growth from capital appreciation.”
With $41 billion in net assets, JEPI is one of the largest actively managed ETFs in the world. The objective of this monthly dividend fund is to deliver a high current income and offer the potential for capital appreciation. The fund has a current yield of 8.2%, which may look paltry compared to SPYT, but it also comes with a more modest expense ratio of 0.35%.
JEPI takes a three-pronged approach to investing shareholders’ capital. First, it constructs a portfolio of equities by selecting high-quality, dividend-paying stocks from within the S&P 500 Total Return Index. Next, it generates income by collecting dividends on those stocks, purchasing high-income equity-linked notes against the benchmark and writing covered calls against the stocks it holds.
JEPI is a sophisticated fund that uses unconventional investment techniques. This ETF may not be suitable for conservative investors, but if you’re looking for high monthly income from a portfolio that includes domestic large-cap stocks, JEPI is worth considering. Around five million shares trade hands each day, on average, so you can feel confident you’ll be able to enter and exit as you please.
JPMorgan Nasdaq Equity Premium Income ETF (JEPQ)
JEPI isn’t the only covered call ETF in the game; its sister fund, JEPQ, applies the same strategy but to the Nasdaq-100 index — and with slightly better results. For the same expense ratio, you can get a two-percentage-point higher yield.
The fund offers a compelling compromise between the high-growth tech sector and monthly income. This compromise gives lower-volatility exposure to the Nasdaq-100. It collects monthly premiums from selling Nasdaq-100 call options. These premiums are then distributed to investors.
That said, the greatest strength of the strategy can also be its kryptonite. By selling the right to buy shares of the Nasdaq-100 through call options, JEPQ limits the upside returns when the Nasdaq runs up sharply. The investors who hold the call options and the right to buy the shares at the lower strike price will likely exercise that right as soon as the index’s price rises. This makes the strategy ideal if your focus is current income, with share appreciation a secondary objective.
[READ: 7 Best International Stock Funds to Buy for 2025]
Global X SuperDividend ETF (SDIV)
SDIV takes dividend income global, with a monthly distribution derived from up to 100 of the highest dividend-yielding equity securities worldwide. This fund’s mandate is simple: Cast a wide net across developed and emerging markets to find the most generous payers, including common stocks, preferred shares and REITs. This global diversification can be an advantage, potentially providing a hedge against market volatility concentrated in any single country, like the U.S.
The key risk here lies in the very nature of high-yield stocks, particularly on a global scale. High yields can signal underlying financial distress, and companies included in the index may be more prone to dividend cuts during economic downturns, which can lead to significant price erosion. This, coupled with a 0.58% expense ratio, may give you pause. However, the fund is one of the best global small- to mid-cap funds on offer, according to U.S. News & World Report rankings. So, if you’re going to add global exposure to your portfolio, this could be a lucrative way to do it.
iShares Preferred and Income Securities ETF (PFF)
PFF targets an often-overlooked hybrid security: preferred stock. Preferred shares occupy a unique space between stocks and bonds, offering the benefits of equity ownership but without voting rights, in exchange for a fixed, reliable dividend payment that ranks higher than common stock dividends. In other words, if the company needs to cut the dividend, it’ll take it from common stockholders before preferred stockholders.
This structure gives PFF a solid ability to pay high, consistent monthly income, which may appeal to fixed-income investors who want to boost their yield beyond traditional high-quality corporate bonds. The downside is that preferred stocks, like bonds, are highly sensitive to interest rate risk. When interest rates rise, the value of fixed-rate securities like those in PFF tends to fall, which can lead to a drop in the fund’s share price. Additionally, the fund is heavily concentrated in the financial sector, and any concentration increases risk.
Vanguard Total Bond Market Index Fund (BND)
BND may be the safest bet on this list if you long for stability in price and income. It doesn’t place concentrated bets on particular sectors or use risky strategies like derivatives to generate income. BND is simply a good old-fashioned bond fund that invests in a comprehensive, wide-ranging portfolio of investment-grade corporate and government bonds. The fund has nearly $384 billion in net assets and, because of its high quality and broad scope, can be used as a core bond fund in a diversified portfolio.
BND tracks the Bloomberg U.S. Aggregate Float Adjusted Index. That benchmark includes only investment-grade bonds but offers exposure to U.S. Treasury securities, domestic corporate bonds, residential and commercial mortgage-backed securities, and international dollar-denominated bonds. All of the securities in the portfolio have maturities of more than one year, with an average effective duration of 5.8 years. This means that for each 1% rise in interest rates, the price of the ETF is expected to fall by around 5.8%. Conversely, for each 1% decrease in interest rates, the ETF may see a price increase by 5.8%.
BND is not a strict replication index fund; instead, it uses a sophisticated sampling process to track the performance of its benchmark. BND has an expense ratio of 0.03% and a trailing dividend yield of 3.8%. It’s not the flashiest dividend fund, but it is one of the cheapest.
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6 Best Monthly Dividend ETFs to Buy Today originally appeared on usnews.com
Update 12/05/25: This story was previously published at an earlier date and has been updated with new information.
