Monthly Pay ETFs Go Mainstream And Retirees LOVE Them
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I opened the conversation by admitting something most investors eventually confront. There are products in the market that sound intriguing, but you are not entirely sure how they work. Monthly pay ETFs fall squarely into that category for many people. Lee stepped in to explain why they have quietly become one of the most useful income tools available today.
How monthly pay ETFs differ
Lee started with the basics. Exchange traded funds trade intraday, unlike traditional open-end mutual funds that settle at the end of the day. What surprised many income investors over the past decade is that while most ETFs originally paid dividends quarterly, a growing group now pays monthly. For retirees, boomers, and older Gen X investors, that distinction matters far more than it sounds.
JEPI and the rise of flagship income ETFs
Lee pointed to JPMorgan (NYSE: JPM) Equity Premium Income ETF, symbol JEPI, as the most widely recognized example. With roughly $30 billion in assets, JEPI pays a monthly yield north of 8%. While it does experience some volatility during broader market drawdowns, Lee noted that income-focused investors continue to support it because consistent cash flow is the primary objective.
Sector-focused monthly income ideas
We also discussed more specialized options. One that stood out was the Gabelli Gold, Natural Resources & Income Trust (NYSE: GGN). Managed by Mario Gabelli’s firm, it holds a mix of gold and energy stocks, effectively pairing two sectors that often perform well during inflationary or volatile environments. GGN pays a monthly dividend above 8%, making it attractive for investors who want sector exposure alongside income.
Another higher-yield option Lee mentioned was BlackRock Science and Technology Trust II (NYSE: BSTZ), a technology-oriented income fund paying monthly distributions exceeding 11%. These types of funds are not designed for ultra-conservative investors, but for those willing to accept some volatility, the income potential can be compelling.
Who these ETFs are really for
Lee emphasized that monthly pay ETFs are particularly well suited for boomers and Gen X investors nearing retirement. They are not replacements for Treasury bonds or insured products, but they serve as powerful income complements. Even investors who do not currently need the income can reinvest monthly dividends, taking advantage of dollar-cost averaging. When prices dip, reinvested dividends buy more shares, enhancing long-term income potential.
The broader takeaway
We agreed that monthly pay ETFs are one of the most practical innovations in income investing over the past decade. They combine liquidity, yield, and flexibility in a way traditional dividend stocks and mutual funds often cannot. Whether used to fund living expenses or to compound income over time, they give investors another way to turn portfolios into cash-flow engines.
Transcript:
[00:00:04] Doug McIntyre: Lee, there’s something out that I don’t even know how it works, but you do. It’s monthly pay ETFs. Tell me about them, I’m not familiar.
[00:00:13] Lee Jackson: Well, everybody is probably pretty familiar with the exchange traded fund now and the way they vary from the old opened end mutual fund, exchange traded funds, trade on the major exchanges and they’re, you can buy and sell ’em anytime during the day when you want, at any price.
[00:00:31] It doesn’t matter. Whereas when you wanna sell your Vanguard, open-end mutual fund, you may have to call Vanguard and sell and you’ll get the end of the day price. Yeah. But, one of the things that we found out and I was intrigued by, ’cause I’ve written about dividend and dividend paying stocks at, 24/7 for almost 15 years, is that most of these ETFs paid like mutual funds.
[00:00:55] They pay quarterly. But in the last 10, 8, 10 years, they started to have ETFs that paid monthly. And think of that if you’re a boomer, an older, gen X person getting, what Better to supplement your passive income. And remember, passive income is income. that the IRS views, it’s anything from your job.
[00:01:19] So if you have stocks or bonds or real estate or things like that that generate income, that’s passive income. Well, some of the really good ones that we like, and one of the biggest ones is it’s got $30 billion in it, is run by JP Morgan and it’s the, symbol on it is JEPI. It pays about an eight 15% yield monthly.
[00:01:43] Wow. Monthly and you know it ha has it gone up and down a little bit? Did it go down a little bit, when we had the draw down in late October and November? Yeah, but then it came right back. ’cause who doesn’t want an eight 40 or eight 50, whatever it is, dividend monthly with, I mean, is there risk? Sure, because it is, it’s not a treasury bond yielding 3.8%.
[00:02:07] It’s yielding 8.3% or whatever it is. That’s a good one. Another one we like and this is especially interesting if it’s people that are wanting a sector play, is, the Gabelli Gamco trust, symbol. GGN. Yeah. All, it holds is gold stocks. And energy stocks, so that’s almost your perfect Paris trade in one.
[00:02:33] You’ve got the red hot gold stocks, which Goldman Sachs thinks exceed 4,900 next year, and then it has all of the quality energy stocks, but it pays monthly. The dividend on GGN is in the eight plus percent range. It’s run by Mario Gabelli’s company. He’s been on wall team for 50 years. So that’s a good shot to take.
[00:02:57] Another good one that we like it’s, the symbol is BSTZ and it’s sort of a income related technology play, but the, again, the dividends monthly, it’s about 11.2%. And again, these aren’t for people that are very, very, very conservative. All the JP Morgan one you could go with, it’s, that’s pretty good. Very conservative, really all, and they all use big, they write covered calls on their positions. The stocks go up, they get called away, they replace it with another stock or buy the stock again. But I think for boomers, gen X people that are steering towards retirement, these are the perfect adjuncts to social security, pension funds, IRA distributions, anything like that. every bill that you have to pay for the most part comes monthly. Your car payment or your mortgage payment doesn’t come every quarter, comes every single month.
[00:04:01] And what better way to augment income with passive income? And these are good, good ideas and we constantly write about this. So if you keep checking on, 24/7 Wall Street, you’ll see our ideas, I mean, we have so many good writers covering this now,
[00:04:18] we probably have 10 guys and gals that are covering the exchange traded fund, income stocks. So they’re a good way to generate money. And, again, if you don’t need the income, if you don’t need the income, you can reinvest your dividends.
[00:04:33] Just go to your broker and say, I wanna reinvest these every month. So if, it goes up a little bit and you’re reinvesting, you won’t buy as much. But if it does go down, like the draw down we had in October and November, you’ll buy more shares. So either way, just remember it. It’s like the dream investment for boomers, the monthly pay etf.
[00:04:53] So check ’em out