ETF Spotlight Series: 4 Best High Dividend ETFs that Pay Monthly

What is ETF dividend yield?

The dividend yield represents the income generated by the ETF as a percentage of its share price. Let's take an example of an ETF called "ABC Dividend ETF." Suppose the current share price of ABC Dividend ETF is $100. The ETF has an annual dividend yield of 4%. To calculate the dividend yield, we multiply the annual dividend yield by the share price: Dividend Yield = 4% * $100 = $4. 

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This means that for every share of ABC Dividend ETF that you own, you would receive an estimated $4 in dividends per year, or $0.33 every month.

Don’t just chase yield, there are risks.

When you purchase a share of an ETF, you encounter similar risks to buying an individual stock like Tesla. The share price of the ETF can vary, causing fluctuations in the overall value of your investment.

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In this ETF Spotlight Series, we set out to discover four high dividend ETFs offering dividend yields up to twice as much as your bank interest.

JPST: The Safe Bet 😌

• Full name: JPMorgan Ultra-Short Income ETF
• Current Yield: 4.83%
• 5-yr return: 0% DCA: -0.02%
• Size: $24.7B in assets under management
• Number of holdings: 615
• Fees: 0.18% (average ETF cost is 0.16%)
• Volatility: Very Low (5-yr beta is 0.07)
• Summary: For those seeking higher interest without taking risks, this bond-focused ETF provides a stable option. With a current yield of 4.83%, it exceeds top savings account interest rates while maintaining a consistent share price over the past 5 years.

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JEPI: The New ETF Sensation 😎

• Full name: JPMorgan Equity Premium Income ETF
• Current Yield: 9.79%
• Return (since inception): 7.90% DCA: 8.14%
• Size: $25.2B in assets under management
• Number of holdings: 135
• Fees: 0.35% 
• Volatility: Low (Beta is 0.58)
• Summary: Introduced in 2020, JEPI has gained popularity due to its high monthly dividend payments (2x the current savings account interest rate). Leveraging call options, JEPI benefits from market volatility. If you are looking for a high dividend ETF to cover personal expenses, JEPI presents a promising choice.

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JEPQ: The Twin 👯

• Full name: JPMorgan Nasdaq Equity Premium Income ETF
• Current Yield: 13.95%
• Return (since Inception): -3.78% DCA: 4.35%
• Size: $2.4B in assets under management
• Number of holdings: 87
• Fees: 0.35% 
• Volatility: Low (Beta is 0.89)
• Summary: Building on JEPI's success, JEPQ was introduced in 2022. JEPQ is designed to perform well in bear markets.This is another good option if you prioritize dividend cash flow, but don’t expect the current high dividend yield to remain elevated forever.

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Share’s Dividend Yield: The Perfect Blend 💯

• Current Yield: 3.23%
• 5-yr return: DCA: 36.7%
• Number of holdings: 14
• Fees: free 
• Volatility: moderate (5-yr beta is 0.63)
• Summary: If you are looking for a balance between return and dividend, Share’s Dividend Yield stands out. What sets it apart is that it charges no fee and boasts the highest dollar-cost-average (DCA) return over a 5-year span. If you seek a blend of return and dividends, Share's Dividend Yield is an exceptional choice.

How to invest in high dividend ETFs:

Based on your investment goals, different ETFs can meet your needs. For those seeking high dividends to cover monthly expenses, JEPI and JEPQ are viable choices. If safety is your priority, JPST offers a secure option with better returns than a savings account. For a balance between dividend yield and overall return, Share's Dividend Yield stands as an excellent choice.