.avif)
Try it now!
Managing your investments has never been easier!
Are you tired of waiting three months between dividend payments? Monthly dividend ETFs could be your steady income solution in today's market. These dividend-paying ETFs offer a unique blend of regular income and potential for capital appreciation, making them attractive options for income seekers and investors looking for portfolio stability.
Most companies pay dividends quarterly4, but right now 76 stocks pay dividends monthly, and many offer impressive yields above 7%10. Income-focused investors find this regular payment schedule very appealing, especially when compared to traditional quarterly dividends or semi-annual dividends.
In this piece, we'll look at the top monthly dividend ETFs for September 2025. You'll learn what factors matter before investing and how to add these income-generating assets to your investment strategy effectively.
You should understand what you're buying before rushing to add monthly dividend ETFs to your portfolio. Monthly payment schedules look attractive. But several key factors beyond distribution frequency should shape your decision when selecting the best dividend funds.
High dividend yield often signals trouble, not opportunity. When stock prices fall or profits weaken, yields spike, but that can mean dividends are unsustainable. Some ETFs boost payouts through leverage or by concentrating in riskier sectors like mortgage REITs and MLPs (master limited partnerships).
Before chasing double-digit yields, check these red flags:
The takeaway: the best monthly dividend ETFs strike a balance. A slightly lower, steady yield is usually safer than chasing unsustainably high payouts. Yield sustainability is crucial for long-term success.
Monthly dividend ETFs may offer attractive yields, but fees can quietly erode long-term returns. While some funds charge under 0.10%1, others exceed 1%3 — and over time, this cost difference can significantly reduce returns. For example, over 25 years, a $100,000 investment earning 4% annually would grow to about $212,000 with a 0.50% expense ratio versus roughly $161,000 with a 1.50% expense ratio — a difference of more than $50,000 in lost growth.
Beyond expense ratios, consider:
Tip: always compare an ETF's gross vs. net expense ratios, since temporary fee waivers can make costs look lower than they are.
A key advantage of monthly dividend ETFs over individual monthly dividend stocks is instant diversification. Instead of relying on one company, and risking dividend cuts like those that hurt investors in General Electric9, these funds spread income across dozens or even hundreds of holdings.
Diversification works on multiple levels:
This consistency makes monthly dividend ETFs especially appealing for retirees and income-focused investors who prioritize steady cash flow. Automatic dividend reinvestment of monthly dividends also creates a natural dollar-cost averaging effect, helping investors accumulate shares more evenly over time.
When evaluating a fund, look at its strategy: some focus on dividend growth, others on maximum yield. The right choice depends on whether you value stability, growth, or higher current income. The key is sustainability — monthly payouts only matter if the underlying dividends are supported by strong fundamentals.
Based on yield, risk profile, and payout consistency, the 8FIGURES AI Investment Advisor highlighted the following five ETFs for September 2025. Each brings something unique, depending on your income goals and risk tolerance.
JEPI is one of the most popular income ETFs, with ~$41 billion in net assets and an ~8% distribution yield7. Its strategy combines S&P 500 equities with a covered call strategy (via equity-linked notes), creating steady monthly dividend income while preserving some growth potential.
Performance has been mixed in 2025—its year-to-date return of 4.5% trails peers8, but its three-year annualized return of 10.2% shows strong long-term consistency. JEPI's appeal lies less in outperformance and more in reliable monthly payouts, making it a solid core holding for income-focused investors looking for high dividend ETFs.
SPHD tracks 50 S&P 500 stocks with both high dividends and low volatility, rebalanced twice a year. With a yield roughly ~3.5–4.6% in 2025, it leans on steady sectors like Real Estate, Utilities, and Consumer Staples6. Its holdings are spread evenly, avoiding single-stock risk. For investors seeking stable monthly income without chasing extreme yields, SPHD is a dependable choice among dividend funds.
SDIV stands out with around 10% yield, drawn from 100 of the world's highest-yielding stocks5. Its rules-based approach removes dividend cutters and keeps equal weights across holdings. The trade-off: performance has lagged, and both price and payouts have declined over time. SDIV fits investors who prioritize maximum income today, though sustainability remains a question mark. It's worth noting that this high dividend index ETF may be more susceptible to economic slowdown impacts.
PFF offers exposure to U.S. preferred stocks, combining bond-like fixed payouts with stock ownership. With over $14 billion in assets and a 6% yield, it provides steady monthly income and lower volatility than common equities2. Spanning 400+ holdings, PFF is a strong option for investors seeking reliable cash flow with moderate risk. However, be aware of potential interest rate risk associated with preferred securities.
DES adds diversification by focusing on U.S. small-cap dividend stocks, an area often overlooked in income portfolios. With over $1.8 billion in assets and an expense ratio of 0.38%, it distributes dividends monthly12. While its yield is more modest at around 2–3%, DES provides exposure to companies with higher long-term growth potential compared to traditional large-cap dividend ETFs. This makes it a strong complement for investors seeking stability and diversification rather than maximum yield.
Monthly dividend ETFs can provide steady cash flow, but they also carry unique risks. Knowing these pitfalls helps you choose funds that match your goals.
Unusually high yields often signal trouble. A stock's price may fall while its dividend stays the same, making the yield look artificially high — until the payout eventually gets cut. Funds that chase the very highest yields often fill their portfolios with shaky companies. Watch for:
High yield doesn't always mean high value. Sustainable income comes from companies with strong fundamentals, often including blue chip companies known for dividend appreciation.
Dividend ETFs often cluster in mature, high-payout sectors like real estate, utilities, and financials. This can leave investors overexposed to industry downturns, for example, mortgage REITs swing sharply with interest rate changes. A fund with hundreds of holdings may look diversified, but if most are in the same sector, risk remains concentrated.
During market corrections, dividend-heavy funds face pressure to maintain payouts just as stock prices fall. Rising interest rates add another challenge: when safer bonds yield more, dividend ETFs lose appeal, often driving share prices down.
Some funds manage stress better than others — option-writing strategies or low-volatility approaches typically hold up more defensively. Reviewing how an ETF performed in past downturns can reveal how resilient its income really is.
Monthly dividend ETFs are more than just high-yield plays. They can serve different roles depending on your goals.
For retirees, replacing a paycheck is one of the hardest transitions. Social Security covers only part of typical expenses, so consistent investment income matters. Monthly dividend ETFs help fill the gap with payments that align to real-world spending patterns. This schedule provides both cash flow management and peace of mind, reducing the stress of quarterly "feast-or-famine" payouts.
If you don't need the income today, reinvesting monthly dividends accelerates compounding. Automatic reinvestment steadily increases your share count, creating a natural dollar-cost averaging effect. Compared to quarterly distributions, monthly cycles give you more frequent opportunities to reinvest, boosting long-term growth. This strategy can be particularly effective with dividend growth ETFs.
Not all monthly dividend ETFs are alike. Dividend growth funds prioritize consistency, high-yield ETFs maximize current payouts, and option-enhanced funds (like JEPI) aim to add income while reducing volatility. Preferred-stock or bond-based ETFs can further stabilize returns. A thoughtful mix of these types can provide reliable income plus growth potential, fitting neatly into a broader asset allocation plan.
Monthly dividend ETFs can play a valuable role in today's market, offering steady income streams, reinvestment opportunities, and diversification. But the best choices balance yield with sustainability — high payouts are only useful if they last.
Funds like JEPI and SPHD show how different strategies can serve income investors: one uses covered calls to prioritize current income, the other targets lower volatility. Others, like PFF (preferreds) or DES (U.S. small-cap dividend exposure), add variety by mixing in different asset types and size factors. The right blend depends on your goals, time horizon, and risk tolerance.
The key takeaway: don't chase the highest yields blindly. Instead, build a portfolio that delivers reliable monthly dividend income and potential long-term growth. Consider factors like inception date, distribution yield, and the fund's approach to maintaining regular income when making your selections.
These five ETFs were selected by the 8FIGURES AI Investment Advisor for September 2025. To see how they fit your portfolio and to track yield, diversification, and risk in real time, explore them in the 8FIGURES app.
REFERENCES
Managing your investments has never been easier!
