3 Monthly Dividend ETFs That Crush SCHD for Total Returns

There are new cohorts of exchange-traded funds that can deliver double-digit total returns while paying you dividends every month. ETFs like these give you much more flexibility compared to those that pay out every quarter. Why settle for a quarterly “allowance” when these funds drip cash straight into your brokerage sweep account twelve times a year? Monthly ETFs are perfect for retirees who want to budget flexibly, or for those who want more efficient compounding.

Schwab U.S. Dividend Equity ETF (NYSEARCA:SCHD) is one of the most popular dividend stocks. It pays a respectable yield and does so with consistency and stability. However, if you are tired of waiting every quarter and you want more long-term performance, it is a good idea to look into other ETFs to hold alongside SCHD.

Here are three to look into.

Amplify CWP Enhanced Dividend Income ETF (DIVO)

Amplify CWP Enhanced Dividend Income ETF (NYSEARCA:DIVO) is an actively-managed ETF that pays monthly dividends. It combines a portfolio of high-quality U.S.-based large-cap stocks that have grown their dividends consistently. On top of that, it has a covered-call strategy to boost income. Unlike fully covered call ETFs, DIVO’s managers (Capital Wealth Planning) can choose not to write calls on stocks expected to appreciate significantly.

Here are its top 10 holdings:

It focuses on 20-30 large-caps from the S&P 500. This approach targets gross annual income of 2-3% from dividends and 2-4% from option premiums. This ends up in total yields that have exceeded those paid by the SCHD. It comes with a 4.59% dividend yield (vs. SCHD’s 3.73%) and has a 5-year total return of 81.98%, vs. SCHD’s 79.24%. The expense ratio is higher here at 0.56%, or $56 per $10,000 invested, compared to SCHD’s expense ratio of 0.06%, or $6 per $10,000 invested.

WisdomTree U.S. Total Dividend Fund (DTD)

WisdomTree U.S. Total Dividend Fund (NYSEARCA:DTD) tracks the WisdomTree U.S. Dividend Index, which selects and weights U.S. companies based on the dollar amount of dividends they pay. In turn, it captures the dividend-paying segment of the U.S. market and does not include non-dividend payers or master limited partnerships (MLPs) and business development companies (BDCs).

It holds a very diversified basket of stocks and has delivered gains with remarkable consistency and stability. Here are its top holdings:

The catch is that DTD comes with a dividend yield of ~2%. In terms of total return, it is still ahead. The 5-year total return is 93.32%, and the expense ratio here is just 0.28%, or $28 per $10,000.

It will still fit the bill for many investors looking for monthly dividends. ETFs that pay monthly are generally the ones with very high yields and lower capital gains. DTD is one of the few that pay you a small yield monthly while giving you exposure to the broader stock market.

Vanguard FTSE Canadian High Dividend Yield Index ETF (VDYIF)

Vanguard FTSE Canadian High Dividend Yield Index ETF is a Canadian ETF that is quite unknown to most American investors, but you can buy it over the counter, which gives you full exposure to VDY on the Toronto Stock Exchange.

VDY tracks the FTSE Canada High Dividend Yield Index. The index starts with dividend-paying stocks from the broader FTSE Canada All Cap Domestic Index (excluding real estate investment trusts, or REITs), ranks them by forecasted yield and selects the higher-yielding portion. Then, it selects stocks until their total market value adds up to 50% of the overall market value of all eligible stocks. These stocks are then given weights based on their individual market values. VDY holds nearly all the index’s constituents in the same proportions to mirror its performance closely, before fees.

Here are the top holdings:

VDY comes with a 4.2% annual dividend yield, paid monthly. The expense ratio is just 0.22%, or $22 per $10,000 invested. VDY has a five-year total return of ~73%.

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.