Top 5 Monthly Dividend ETFs for High Growth in 2024

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Top 5 Monthly Dividend ETFs with High Growth Potential for 2024

If you're looking for investments that pay out cash each month, this article is for you. Here, we explore the top 5 dividend ETFs that pay monthly dividends. For those new to the channel, you can find a detailed spreadsheet with these ETFs and more in the description below. If you enjoy dividend-paying investments, you likely fall into one of two categories: those who seek regular cash payouts to supplement living expenses, and those who reinvest dividends to achieve growth during both good and bad times.

Before diving into the top ETFs, let's start with a quick quiz. If you were given two ETFs that paid monthly dividends, which one would give you a higher total return in one year? The first ETF has a total return of 9% with a 3% dividend yield, while the second has a total return of 6% with an 11% dividend yield. Which one provides a better return on your investment by year's end?

The answer is the first ETF with a total return of 9%. This may surprise some, as they might instinctively add the 11% yield of the second ETF to its 6% return. However, the total return already includes the reinvested dividend and expenses. Understanding this is crucial when evaluating dividend-paying investments.

Top Monthly Dividend ETFs

1. J.P. Morgan NASDAQ Equity Premium Income ETF (JEPQ)

Symbol: JEPQ

Strategy: Invests in US large-cap companies from the NASDAQ 100 Index and up to 20% in equity-linked notes.

Top Holdings: Microsoft, Apple, Alphabet, Nvidia, Meta.

Performance: Healthy compounded annual growth rate (CAGR) and total return outperforming the S&P 500 over the trailing 12 months.

Dividend Yield: 9.66%

Expense Ratio: 0.35%

JEPQ is relatively new with limited historical data but offers a blend of growth and dividends, making it an attractive option for investors seeking both.

2. SPDR Dow Jones Industrial Average ETF Trust (DIA)

Symbol: DIA

Strategy: Invests in 30 blue-chip companies.

Top Holdings: High-quality companies in technology, financial services, and healthcare.

Performance: Consistent performance over the trailing 12 months, three years, and five years.

Beta: 0.81 (less volatile than the market)

Dividend Yield: Moderate

Expense Ratio: 0.16%

DIA provides a stable investment with lower volatility, making it suitable for weathering market fluctuations while still offering decent dividends.

3. Amplify CWP Enhanced Dividend Income ETF (DIVO)

Symbol: DIVO

Strategy: Invests in S&P 500 companies, generating income from dividends and option premiums.

Top Holdings: Leading S&P 500 companies.

Performance: Solid growth in ETF price, healthy dividend above 4%.

Expense Ratio: Moderate

DIVO’s strategy of writing call options to generate income makes it a sustainable monthly dividend ETF with consistent growth.

4. J.P. Morgan Equity Premium Income ETF (JEPI)

Symbol: JEPI

Strategy: Generates income from selling options on US large-cap stocks, providing a buffer against market volatility.

Top Holdings: High-growth tech companies.

Dividend Yield: 8.26%

Performance: Stable but slightly lower growth due to options trading.

JEPI balances income generation through dividends and options trading, offering a healthy dividend yield but with slightly stunted overall growth.

5. WisdomTree U.S. Quality Dividend Growth Fund (DGRW)

Symbol: DGRW

Strategy: Invests in large and mid-cap dividend-paying stocks.

Top Holdings: Microsoft, Johnson & Johnson, Procter & Gamble, Coca-Cola.

Performance: Strong performance with a 17% trailing 12-month return, 11% three-year return, and 14% five-year return.

Dividend Yield: Lower compared to others but best long-term performance.

Expense Ratio: Moderate

DGRW offers solid returns and lower volatility, making it an excellent long-term investment for those seeking quality dividend growth.

Conclusion

Investing in monthly dividend ETFs can provide a steady income stream and potential for growth. The J.P. Morgan NASDAQ Equity Premium Income ETF (JEPQ), SPDR Dow Jones Industrial Average ETF Trust (DIA), Amplify CWP Enhanced Dividend Income ETF (DIVO), J.P. Morgan Equity Premium Income ETF (JEPI), and WisdomTree U.S. Quality Dividend Growth Fund (DGRW) are among the top choices for 2024.

Each ETF has unique features and strategies, so consider your investment goals and risk tolerance before making a decision. For a comprehensive comparison, check the spreadsheet linked in the description, which includes estimates for potential earnings over three and five years with a $10,000 investment, both with and without dividend reinvestment.

Remember to conduct thorough research and consult with a financial advisor to ensure these investments align with your financial objectives. Happy investing!