30 Aug Top 5 Best Monthly Dividend ETFs for Long-Term Investors
Read Online Futures Broker’s Selection of Top 5 Best Monthly Dividend ETFs for Long-Term Investors
Having constant monthly income from dividends is an investor’s dream. When you have money coming in every month you don’t have to worry about bills. It’s hard, however, to depend on dividend stocks for income since most of them only pay quarterly. Currently, there are very few dividend stocks that will pay you monthly. The good news, however, is that there are ways you can get that constant monthly income safely through different dividend ETFs. We’ll start by having a look at the good and the bad side of quarterly dividends and the monthly dividends. Afterward, look at some of the best monthly dividend ETFs to invest in.
Monthly Dividends vs. Quarterly Dividends
When you have a lot of money and dividend stocks, you can still have money every month. Compared to quarterly dividends, monthly dividends are much better when planning how you’ll spend your money. When you invest in quarterly dividends you’ll have your pay the same time every year. They have a set date for particular months where they pay. Some pay January, April, July, and October like AT&T. Others pay February, May, August, and November like Johnson and Johnson.
There is a stronger devotion to dividends when it comes to those that pay monthly. Dividend cuts are dangerous and that’s why monthly dividend investors have shared so no decision is made without their knowledge. When it comes to both, you should invest in quarterly dividends as well even if you choose to venture into monthly dividends.
Five Highest-Paying Monthly Dividend Stocks
The following monthly dividend ETFs are a great choice for long-term investors as they offer dividend yields that surpass 5%. If you invest in any of them you can have constant cash flow every month. You won’t have to worry about bills. Also, with these monthly dividend ETFs, your investment portfolio’s capital has a good shot at a steady growth.
PCEF – Invesco CEF Income Composite ETF
The S-Network Composite Closed-End Fund IndexSM is tracked by the Invesco CEF Income Composite. The funds that are incorporated in the index are secured by 90% of the fund’s assets. This find, in particular, doesn’t invest its assets in individual securities. It’s known as a “fund-of-funds,” this is because all of its assets are invested in the index fund’s common shares.
Between December 2018 and November 2019, the fund’s share price went up by 17%. It had a forward dividend yield of 7.21% and a total return of 13.2%. The assets were approximately $770 million and they were distributed to 136 individual holdings.
SPFF – Global X SuperIncome Preferred ETF
The Global X SuperIncome focuses on preferred shares with the most dividend yields and invests in them. A preferred share offers a steady dividend income that is more than those of other regular stocks. If you’re a stockholder, a preferred will get paid out before you. They are much safer, and also, at some point with a particular price they can be converted to a regular stock. Therefore, if you invest in preferred shares you’ll be expecting great safety and much higher yields.
SPFF has a 6% dividend yield since it invests in the top 50 highest paying preferred shares. Global X prefers bank stocks and financials since they pay more. The total return of the fund in the past year is 13%, which is a great number from a specialized ETF.
EMLC – JP Morgan Emerging Markets Local Currency Bond ETF
This ETF has assets worth almost $5 billion. It’s made up of bonds that are distributed by market governments that are coming up. The issuer’s local currency is the one that denominated the bond. Almost 99% of all of its 296 holdings have government-issued securities. A percentage of the assets are provided by energy fields, finance, and utilities. Brazil (10.09%), Mexico (9.39%), and Indonesia (9.26%) respectively, are the top represented countries with the most assets. The total return of the fund is 11% and the dividend yield is 6.38%.
ANGL – VanEck Vectors Fallen Angel High Yield Bond ETF
The VanEck fund is mainly focused on investing in bonds that have a high rating in investment-grade, but on the other hand, lowered into high yield. The main aim is a great financial rating. It’s safe for investing because about 93% of the bonds are below the investment-grade and in the top two risk ratings. The interest rates are still high even though the bond price goes down when the fund is downgraded. The bonds have been able to perform better than most high-yield indexes due to their default rate.
Ever since 2012, the return rate per year of ANGL has been 8.4%, and the dividend yield is 5.2%. The expense ratio is 0.4% which is considerably low. United States companies hold the majority of the fund’s bonds, the other percentage is other developed countries within different fields. There are also bonds from nine companies in nine different fields.
MDIV – First Trust Multi-Asset Diversified Income ETF
MDIV is an all-in-one asset investment, it focuses on investing in asset classes that produce more payments. The investment from the fund is evenly distributed between five asset classes they include:
- High-yield bonds
- Dividend stocks
- Preferred shares
- MLPs
- REITs
It has a 0.7% management fee, but it’s low compared to other closed-end funds. It also has a dividend yield of 6.7%. The risk of the shares is 8% out of 12% on the S&P 500 index. Nonetheless, this fund is much safer than stocks when it comes to investing.
Top 5 Best Monthly Dividend ETFs for Long-Term Investors: Final Thoughts
The above monthly dividend ETFs, have different forward dividend yields that make each of them unique. You should do your research and look at which one will fit your portfolio strategies. There are a lot of things investors should consider based on the different ETFs including long-term and short-term returns, share-price trends, payout ratios, among others. When planning on taking a dividend check each month, you should know the months that dividend stocks are paid by different funds. After taking everything into consideration you can choose which monthly dividend ETFs to invest in.
Do you have other ideas of what to add to this list of Top 5 Best Monthly Dividend ETFs for Long-Term Investors? Make sure to share your opinion in the comments!
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