7 Highest-Yielding Monthly Dividend ETFs (and Their Pros and Cons)

During periods of market turbulence, some investors may seek out investments that offer stability and reliability, such as a fund that provides regular income distributions.

One option for investors looking for monthly income streams is monthly dividend ETFs. While these funds offer the convenience of monthly payouts from a single investment, they also come with certain drawbacks.

A monthly dividend ETF is an exchange-traded fund that distributes dividends on a monthly basis. These ETFs invest in various assets and employ different strategies to achieve their objectives.

Some monthly dividend ETFs, like the JPMorgan Equity Premium Income ETF (JEPI), actively trade stocks to generate monthly income for shareholders. Others, such as the iShares Preferred and Income Securities ETF (PFF), focus on dividend-paying stocks like preferred stock. There are also ETFs that derive their monthly dividend payments from bonds, such as the State Street SPDR Portfolio High Yield Bond ETF (SPHY), or from other debt securities like collateralized loan obligations, as seen in the Janus Henderson AAA CLO ETF (JAAA).

Below is a list of the top 7 high-yield ETFs that pay dividends monthly, ranked by dividend yield. To ensure quality and reliability, we have filtered this list for ETFs with at least 5 years of existence, assets of at least $10 billion, and expense ratios below 0.5%.

Sources: VettaFi and Finviz. Data accurate as of February 10, 2026, for informational purposes only and not for trading.

• Regular income: For retirees or those seeking passive income, monthly dividend ETFs can provide a steady cash flow without the need to sell investments. For example, a $50,000 investment in the highest-yielding ETF mentioned, JEPI, could yield around $337 per month on average, offering a helpful supplement to one’s budget.

• Diversification: Investors heavily focused on growth stocks, which can be volatile, may benefit from including monthly dividend ETFs in their portfolio. These ETFs offer income stability that can balance out the overall risk of the portfolio.

• Reliable payouts: Due to their diversified nature, monthly dividend ETFs may offer more stable income distributions compared to individual dividend stocks, reducing the risk of significant dividend cuts.

• Underperforming the S&P 500: While the listed ETFs have higher yields than the S&P 500, they have not outperformed it in terms of total return, primarily due to lower price appreciation. This is a common issue with dividend stocks, as they may offer consistent cash flow but tend to be less exciting in terms of price performance compared to growth stocks.

• Tax implications: Unlike stocks that generate income through price appreciation, dividend stocks, including monthly dividend ETFs, provide taxable income through their distributions, unless held in tax-advantaged accounts like an IRA.

• Lower yields compared to monthly dividend stocks: While monthly dividend ETFs offer reduced risk of dividend cuts compared to individual stocks, their yields are typically lower. In fact, the highest-yielding ETF mentioned has approximately half the yield of the top-yielding individual stock in the monthly dividend stock category.