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7 Highest-Yielding Monthly Dividend ETFs (and Their Pros and Cons)
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7 Highest-Yielding Monthly Dividend ETFs (and Their Pros and Cons)
Monthly dividend ETFs provide a source of frequent payments from a single investment, but they have their downsides.
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9 years of experience Expertise Stocks ETFs economic newsSam Taube writes about investing for NerdWallet. He has covered investing and financial news since earning his economics degree from the University of Maryland in 2016. Sam has previously written for Investopedia, Benzinga, Seeking Alpha, Wealth Daily and Investment U, and has worked as an editor for Investment U, Wealth Daily and Haven Investment Letter. He is based in Brooklyn, New York.
Sam Taube writes about investing for NerdWallet. He has covered investing and financial news since earning his economics degree from the University of Maryland in 2016. Sam has previously written for Investopedia, Benzinga, Seeking Alpha, Wealth Daily and Investment U, and has worked as an editor for Investment U, Wealth Daily and Haven Investment Letter. He is based in Brooklyn, New York. Published in Lead Writer + more + more
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13 years of experience Expertise Brokerage accounts stock market cryptocurrencyChris Davis is a Managing Editor on the Investing team. He has passed the Series 65 (Uniform Investment Adviser Law Exam) and covered the stock market, investing strategies, investment accounts and cryptocurrency. His work has appeared in The Associated Press, The Washington Post, MSN, Yahoo Finance, MarketWatch, Newsday and TheStreet.
Chris Davis is a Managing Editor on the Investing team. He has passed the Series 65 (Uniform Investment Adviser Law Exam) and covered the stock market, investing strategies, investment accounts and cryptocurrency. His work has appeared in The Associated Press, The Washington Post, MSN, Yahoo Finance, MarketWatch, Newsday and TheStreet. Published in Managing Editor + more + moreThis article originally appeared in NerdWallet's investing newsletter, the Nerdy Investor. You can subscribe for free here.
This article originally appeared in NerdWallet's investing newsletter, the Nerdy Investor. You can subscribe for free here This article originally appeared in NerdWallet's investing newsletter, the Nerdy Investor. You can subscribe for free here .In these times of market volatility, some investors might want an investment that offers some level of stability and reliability, such as a fund that regularly pays out income.
In these times of market volatility, some investors might want an investment that offers some level of stability and reliability, such as a fund that regularly pays out income.Monthly dividend ETFs are one option. But although these funds offer monthly income streams from a single investment, they do have some potential downsides.
Monthly dividend ETFs are one option. But although these funds offer monthly income streams from a single investment, they do have some potential downsides.What is a monthly dividend ETF?
What is a monthly dividend ETF?A monthly dividend ETF, as its name implies, is an exchange-traded fund that pays out dividends every month. Different monthly dividend ETFs invest in different kinds of assets and use different strategies to achieve this.
A monthly dividend ETF, as its name implies, is an exchange-traded fund that pays out dividends every month. Different monthly dividend ETFs invest in different kinds of assets and use different strategies to achieve this.Some, like the JPMorgan Equity Premium Income ETF (JEPI), actively trade stocks to generate capital gains that can be paid out to shareholders monthly. Others, like the iShares Preferred and Income Securities ETF (PFF), invest in dividend-paying stocks such as preferred stock. Then there are monthly dividend ETFs that generate their monthly dividend payments from bonds, such as the State Street SPDR Portfolio High Yield Bond ETF (SPHY), or from other types of debt securities such as collateralized loan obligations, as in the case of the Janus Henderson AAA CLO ETF (JAAA).
Some, like the JPMorgan Equity Premium Income ETF (JEPI), actively trade stocks to generate capital gains that can be paid out to shareholders monthly. Others, like the iShares Preferred and Income Securities ETF (PFF), invest in dividend-paying stocks such as preferred stock . Then there are monthly dividend ETFs that generate their monthly dividend payments from bonds, such as the State Street SPDR Portfolio High Yield Bond ETF (SPHY), or from other types of debt securities such as collateralized loan obligations, as in the case of the Janus Henderson AAA CLO ETF (JAAA).Top 7 monthly dividend ETFs by yield
Top 7 monthly dividend ETFs by yieldBelow is a list of the top 7 high-dividend ETFs (defined here as a yield of 3% or higher) that pay dividends monthly, in order of dividend yield. To weed out overly-expensive or less-established funds, we’ve filtered this list for ETFs that have existed for at least 5 years, have at least $10 billion in assets, and have expense ratios under 0.5%.
Below is a list of the top 7 high-dividend ETFs (defined here as a yield of 3% or higher) that pay dividends monthly, in order of dividend yield. To weed out overly-expensive or less-established funds, we’ve filtered this list for ETFs that have existed for at least 5 years, have at least $10 billion in assets, and have expense ratios under 0.5%.Want to add any of these to your portfolio? Check out our list of the best brokers for ETF investing.
Want to add any of these to your portfolio? Check out our list of the best brokers for ETF investing .The highest-yielding monthly dividend ETF is JPMorgan Equity Premium Income ETF (JEPI), with a dividend yield of 8.16%.
The highest-yielding monthly dividend ETF is JPMorgan Equity Premium Income ETF (JEPI), with a dividend yield of 8.16%.
The highest-yielding monthly dividend ETF is JPMorgan Equity Premium Income ETF (JEPI), with a dividend yield of 8.16%.Ticker
TickerCompany
CompanyDividend Yield
Dividend YieldNet Expense Ratio
Net Expense RatioJEPI
JEPIJPMorgan Equity Premium Income ETF
JPMorgan Equity Premium Income ETF8.16%
8.16%0.35%
0.35%SPHY
SPHYState Street SPDR Portfolio High Yield Bond ETF
State Street SPDR Portfolio High Yield Bond ETF7.25%
7.25%0.05%
0.05%USHY
USHYiShares Broad USD High Yield Corporate Bond ETF
iShares Broad USD High Yield Corporate Bond ETF6.92%
6.92%0.08%
0.08%HYG
HYGiShares iBoxx USD High Yield Corporate Bond ETF
iShares iBoxx USD High Yield Corporate Bond ETF5.92%
5.92%0.49%
0.49%PFF
PFFiShares Trust iShares Preferred and Income Securities ETF
iShares Trust iShares Preferred and Income Securities ETF5.52%
5.52%0.45%
0.45%EMB
EMBiShares J.P. Morgan USD Emerging Markets Bond ETF
iShares J.P. Morgan USD Emerging Markets Bond ETF5.08%
5.08%0.39%
0.39%JAAA
JAAAJanus Henderson AAA CLO ETF
Janus Henderson AAA CLO ETF4.96%
4.96%0.20%
0.20%Source: Finviz. Data is current as of July 1, 2026, and is intended for informational purposes only.
Source: Finviz. Data is current as of July 1, 2026, and is intended for informational purposes only. Make sense of the markets with The Nerdy Investor A weekly wrap on what's moving markets, plus two monthly deep-dives on how to improve your investing, straight to your inbox. Subscribe for freePros of monthly dividend ETFs
Pros of monthly dividend ETFsMonthly income: For retirees, or investors in search of passive income, monthly dividend ETFs may be a useful way to generate cash from your portfolio without needing to sell any investments. A $50,000 investment in the highest-yielding monthly income ETF listed above, the JPMorgan Equity Premium Income ETF, would pay out about $337 per month on average — not a fortune, but enough to cushion your budget somewhat.
Monthly income: Monthly income: For retirees, or investors in search of passive income, monthly dividend ETFs may be a useful way to generate cash from your portfolio without needing to sell any investments. A $50,000 investment in the highest-yielding monthly income ETF listed above, the JPMorgan Equity Premium Income ETF, would pay out about $337 per month on average — not a fortune, but enough to cushion your budget somewhat.Diversification: Suppose your portfolio consists mostly of growth stocks, which tend to increase in price when times are good, but can be volatile when times are bad. In that case, buying monthly dividend ETFs may reduce the overall risk of your portfolio by adding investments that don’t have particularly volatile prices, but instead provide income that can compound your returns.
Diversification: Diversification: Suppose your portfolio consists mostly of growth stocks , which tend to increase in price when times are good, but can be volatile when times are bad. In that case, buying monthly dividend ETFs may reduce the overall risk of your portfolio by adding investments that don’t have particularly volatile prices, but instead provide income that can compound your returns.Potentially more reliable payouts than monthly dividend stocks: ETFs are diversified across many income-producing assets, which means that a monthly dividend fund may have less risk of a large dividend cut than an individual dividend stock (especially the small group of dividend stocks that pay out monthly).
Potentially more reliable payouts than monthly dividend stocks: Potentially more reliable payouts than monthly dividend stocks: ETFs are diversified across many income-producing assets, which means that a monthly dividend fund may have less risk of a large dividend cut than an individual dividend stock (especially the small group of dividend stocks that pay out monthly).Cons of monthly dividend ETFs
Cons of monthly dividend ETFsUnderperforming the S&P 500: Even though all of the funds above have higher yields than the S&P 500, none of them are beating it in terms of total return over the last year, due to less price appreciation. This is often an issue with dividend stocks in general: They may generate cash payments, but they tend to be more “boring” than growth stocks when it comes to price action.
Underperforming the S&P 500: Underperforming the S&P 500: Even though all of the funds above have higher yields than the S&P 500, none of them are beating it in terms of total return over the last year, due to less price appreciation. This is often an issue with dividend stocks in general: They may generate cash payments, but they tend to be more “boring” than growth stocks when it comes to price action.Tax consequences: Many stocks and ETFs make you money by increasing in price, not by paying an income. That means that you won’t owe taxes on them until you sell them. With dividend stocks or funds, particularly monthly dividend ETFs, it’s different — their payments count as taxable income, unless you’re holding them in a tax-advantaged account such as an IRA.
Tax consequences: Tax consequences: Many stocks and ETFs make you money by increasing in price, not by paying an income. That means that you won’t owe taxes on them until you sell them. With dividend stocks or funds, particularly monthly dividend ETFs, it’s different — their payments count as taxable income, unless you’re holding them in a tax-advantaged account such as an IRA .Lower yields than monthly dividend stocks: Although monthly dividend funds may have less risk of a dividend cut than individual monthly dividend stocks, the highest-yielding fund listed above has about half the yield of the highest-yielding stock on our monthly dividend stocks page.
Lower yields than monthly dividend stocks: Lower yields than monthly dividend stocks: Although monthly dividend funds may have less risk of a dividend cut than individual monthly dividend stocks, the highest-yielding fund listed above has about half the yield of the highest-yielding stock on our monthly dividend stocks page .More on income investing
More on income investingBest brokers for dividend investing
Best brokers for dividend investing Best online brokers for bonds Best money market accountsNeither the author nor editor owned positions in the aforementioned investments at the time of publication.
Neither the author nor editor owned positions in the aforementioned investments at the time of publication. Neither the author nor editor owned positions in the aforementioned investments at the time of publication. About the author Sam Taube Sam Taube Sam Taube writes about investing for NerdWallet. He has covered investing and financial news since earning his economics degree in 2016. See full bio.Helpful resources
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